Scottish Widows has launched its standard annuity to the open market, meaning consumers who do not hold a pension with the provider will still be able to buy an annuity.
By allowing non-clients to purchase a standard annuity with Scottish Widows, advisers will be able to offer their own clients a wider range of provider options.
The Scottish Widows enhanced annuity is already available on the open market
Scottish Widows's standard annuity is available directly or through a number of third party portals, such as Iress, Ipipeline, Annuity Exchange, Retirement Line, Tomas, and Synaptic Webline.
Hargreaves Lansdown currently offers the enhanced version but is looking into adding Scottish Widows' standard annuity to the platform.
Scottish Widows has also created an annuity calculator pricing tool which responds to market pricing changes, meaning that advisers will have the most up-to-date rates to offer their clients.
Emma Watkins, director of annuities at Scottish Widows, said: “Retirement planning isn’t a ‘one-size-fits-all’; that’s why we remained committed to the annuities market – while many providers withdrew – because it’s important to us that we continue giving advisers a range of options to offer their clients.
“As fewer people approach retirement today with defined benefit pensions, annuities continue to have a role to play – for the right people in the right circumstances – as they can give peace of mind that essential expenditure will always be paid, irrespective of any market volatility.”
The main annuity providers are currently Aviva, Canada Life, Hodge Lifetime, Just, Legal and General and Scottish Widows.
Hargreaves Lansdown has urged advisers to advise their clients to use a mix of products when approaching retirement to avoid overexposure to volatile annuity rates.
Analysis published by the firm yesterday (September 4), found annuity rates have fallen 14 per cent since the start of the year.
This means a £100,000 pension currently buys a 65-year-old a £4,654 annuity which is £759 less than at the start of the year, based on the best offer available.
The plunge in rates is primarily due to a decline in gilt yields, which have fallen as a result of Brexit uncertainty and because investors fear a slowdown in global growth.
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