Just Retirement has stopped marketing fixed-term annuities to new flexi-access drawdown customers as a result of a fall in demand by advisers in the current low interest rate environment.
Stephen Lowe, group external affairs and customer insight director of the provider, told FTAdviser that at present the product will be available only to existing capped drawdown customers.
“When we launched our new products as a result of pension freedoms and choice we decided we had to keep the capped drawdown bit. We don’t see there being a big need for fixed-term annuities, so we just stopped marketing them.”
Mr Lowe added that for the product to be reinstated by the provider, advisers would have to say there was an opportunity to use them again.
“If the forward interest rate profile begins to jump up - then we could see advisers saying there’s an opportunity to start using them again.”
Daren O’Brien, independent financial adviser at Aurora Financial Solutions, agreed that fixed-term annuities have served their purpose.
“They served a purpose at a time when there were no other options but now that the pension freedoms have opened up there’s not really a requirement for them in the market anymore.”
In February this year Just Retirement has launched a set of products targeted at providing pension freedoms.
At that time, Mr Lowe said the proposition provided the best of both worlds - giving customers a guaranteed income for life and a flexible fund which can be accessed from time to time.