Canada Life has extended its cancellation period for annuity customers who were in their cancellation period on the Budget day to give clients a week on top of an effective deadline recommended by the Association of British Insurers.
However, the company said it would “strongly encourage” customers to seek financial advice before exercising their right to cancel, as it claimed the guaranteed income offered by annuities remained “for many customers... the best way to meet their financial needs in retirement”.
In a statement the company said annuity customers that were already in their cancellation period on the day of the Budget, 19 March, would have until 25 April to cancel their policy should they wish to do so.
Canada Life operates a standard 30-day cancellation period starting from when the annuity policy is issued, which would have meant anyone that purchased an annuity the day before the Budget would have had until this Thursday, 17 April, to cancel.
The new change means that anyone who had purchased an annuity with Canada Life on or after 17 February still has another two weeks from today to cancel the purchase.
Last week the Association of British Insurers said its members were extend cooling-off periods to at least 17 April or were contacting customers to confirm whether they want to go ahead with their chosen annuity.
A number of providers, including LV, Aegon, Partnership and Scottish Widows had already announced extensions to their cancellation periods before the ABI announcement. Others even took the step of temporarily suspending processing of annuities in the wake of the Budget.
A Canada Life spokesperson said: “Annuities offer a guaranteed lifetime income and we believe that for many consumers annuities remain the best way to meet their financial needs in retirement.
“So we strongly encourage customers to seek professional advice before exercising their right to cancel.”
Canada Life’s endorsement of advice comes in the wake of a report from PricewaterhouseCoopers, published this morning, which revealed that close to two-thirds of those approaching retirement may seek advice in the wake of the Budget reforms.
PwC warned that this desire for advice could be undermined by changes that came into force with the Retail Distribution Review last year, which many assert has created an ‘advice gap’ for those with less than £50,000 to invest.
PwC found the average retirement pot among its 1,200 respondents aged between 50 and 75 to be around £40,000.
The government has said it will provide impartial ‘guidance’ to those approaching retirement in light of the changes, to be offered through providers.