Canada Life has unveiled its post-April suite of pension products to allow individuals to take advantage of the new pension freedoms, however it admitted to FTAdviser it does not know the date the products will be launched and that it is still considering the pricing structure.
Canada Life said it will be launching a trio of product, including in addition to a standard flexible drawdown offering a hybrid ‘fixed-term’ plan offering guaranteed income for a set period, and a pension investment plan to offer a single consolidated solution.
The pension investment plan is aimed at individuals with more than one pension who want to consolidate all their plans into one arrangement. Clients can withdraw uncrystallised fund pension lump sums directly from this plan on a regular or ad-hoc basis.
The fixed term income plan is a type of drawdown arrangement that sits between a conventional annuity and drawdown, designed to pay a guaranteed income for a selected term between one and 40 years.
At the end of the term a lump sum - the guaranteed maturity value - will be paid, enabling clients to look at all their options. Customers are not obliged to take income and can request to have all their investment returned as a guaranteed maturity value.
With its flexi-access drawdown option, the firm said it accepts transfers in from any UK registered pension arrangement or drawdown plan and that members of this plan will be able to access their savings without any restrictions.
Charges are still under consideration. The plans are aimed to be launched next month, but the firm could not confirm a specific date.
Pension freedom charges have come under the spotlight in the lead up the rule changes. FTAdviser has published details on the pricing of access options on the updated product ranges for most insurers and providers, which you can view here.
According to the Telegraph today (30 March), the regulator could be set to review charges applied by some firms, especially in relation to legacy schemes, where charges for access to a pension fund could be up to £3,000 a year.
Separately, Canada Life has updated its lifetime annuity to take advantage of the rule changes, offering all the income options previously available, but with some changes.
The second annuitant in a joint life application no longer has to be a spouse, civil partner or financial dependent. Canada Life will now extend the guarantee period up to a maximum of 30 years (previously 10 years) and if the annuitant dies before age 75, the payment can be made tax free to the nominated beneficiary under the new reforms.
Furthermore, annuity protection will remain available up to death occurring before age 75 for one or both applicants. From 6 April the lump sum can be paid to any nominated beneficiary tax free.
Canada Life said that applicants can still obtain an enhanced rate if they qualify, either due to a range of medical conditions or their lifestyle.
ruth.gillbe@ft.com
