Product review: Partnership enhanced annuity

Product review: Partnership enhanced annuity

Partnership has updated its enhanced annuity offering to better suit the pension freedoms that came into effect on Monday.

The new version will allow the insurer to provide benefit-based quotes, meaning a customer could specify an income they wish to achieve and the insurer will tell them how much of their pension pot they need to use to achieve this.

A Target Income Calculator has also been introduced by Partnership, following their research revealing that 38 per cent of 40 to 70 year olds do not know how to work out a retirement budget. This tool will assist advisers in helping clients determine how much income they require to achieve the type of lifestyle they desire in retirement.

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The company also announced that from the start of the next tax year, customers with the enhanced annuity will be granted a maximum guarantee period, more flexibility over their choice of dependants, and value protection.

The maximum guarantee period has been increased from 10 years to 20 years, meaning that if the annuitant dies, their beneficiaries will receive an income for longer. Greater flexibility over choice of dependants allows annuitants to nominate anyone who meets Partnership’s required underwriting and age criteria (between 40 and 100 years old) as the beneficiary.

Value protection means that an annuitant can now leave the remainder of their pot to their dependants, and this is tax free if they die before age 75. Quotes with value protection of any percentage of up to 100 per cent f the original premium with no restriction of the benefit are now offered at age 75.


Annuities face a great challenge following the pension reforms. Many retirees will want to do something else with their savings rather then purchase an annuity, as was the previous default option.

However, a guaranteed income for life is an appealing option. This is especially true considering it is extremely difficult to predict how long you or a client will live, and therefore how long you should budget for retirement savings to last. Annuities still have a place in the market, but also now have the scope for greater flexibility.

Partnership has recognised this opportunity to remodel a current product to better suit the reforms. The company stated that it is supportive of the pension freedoms and have refreshed the enhanced annuity offering to ensure that customers can take advantage of the new freedoms.

The Target Income Calculator will also be a useful resource now that the freedoms have come into effect. Through use of a tool that clearly maps out how far a client’s savings will go depending on their lifestyle needs, advisers can make it easier for clients to understand what realistic options they have when deciding what to do with their savings. Increased flexibility within products, both new and existing, will result in better service from advisers to their clients.