Partnership’s head of product development said the product would become “hugely important” in the UK retirement income market when the full effect of the Budget pension changes take effect in 2015.
He said: “Like every player in the retirement income market, we are obviously considering what the new market looks like and what new products will be appropriate.”
Mr Stopard said the variable annuity model allowed people to keep control of their funds and invest them in whatever mix of equities and other assets they want, maintaining the potential to grow funds after they retire.
However, he added: “Unlike drawdown, there is still a guaranteed level of income, and the risk remains with the provider rather than the individual.”
Mr Stopard said the variable annuity model also provided more flexibility on the investment side than traditional investment-linked annuities in the UK.
He added: “Variable annuities will be a hugely important intermediate between annuities and drawdown after the changes take place. There will be no reason to continue having such a polarised system.”
MetLife, Aegon UK, and Axa Life Invest already offer variable annuities.
Billy Burrows, head of business dev for Peterborough-based Simply Annuities, said: “Variable annuities are really a subset of income drawdown. There will be strong demand for income for life post-Budget, but with more flexible investment options, so variable annuities would provide a strong customer proposition. The devil is in the detail – particularly on the cost of the guarantee.”