Partnership has updated its enhanced annuity offering to reflect yesterday’s (6 April) pension flexibilities, adding ‘benefit-based quotes’ amongst other things.
The change means that in practice a customer can specify an income they want and the insurer will tell them how much of their pension pot they need to use to achieve this, enabling the ‘blended solutions’ many believe will come to dominate the at-retirement market.
As it published research showing 38 per cent of 40 to 70 year olds say they have no idea how to work out a retirement budget, Partnership has also developed a ‘target-income calculator’ to assist advisers working with their clients on this process.
In addition, from the start of the next tax year, customers who choose an enhanced annuity with the firm will see their maximum guarantee period increase from 10 to 20 years, meaning that should the annuitant die, their beneficiaries can receive the income for longer.
This move mirrors MGM Advantage, which last week extended its guarantee period from 10 to 30 years, which it described as effectively offering a ‘money-back’ guarantee. The changes are the result of a change to the rules to make annuities competitive in the new world.
Partnership’s updates also included more flexibility over choice of beneificiaries, with annuitants now able to nominate anyone who meets the firm’s required underwriting and age criteria.
An annuitant can now leave the remainder of their pot to their dependents tax free if they die before age 75, according to the firm’s new rules, offering quotes with value protection of up to 100 per cent of the original premium and no restriction of the benefit at age 75.
The moves come ahead of an anticipated product launch later in 2015.
Andrew Megson, managing director of retirement at Partnership, said: “Looking to the future, we are working hard to develop a new offering which will not only be appropriate as the reforms come in but well into the future.”
He accepted that many will wish to explore the new opportunities they have been offered this week, their research found that 64 per cent of people still want a guaranteed income for life.
“Therefore, we are now providing benefit based quotes which mean that people can determine what guaranteed income they need in retirement and what proportion of their pension pot they need to pay for this.”