Just Retirement is set to launch a new type of fixed term annuity product that allows consumers to switch to an enhanced annuity if they become eligible at any point during the term, rather than at the end of the term.
A research conducted by the company found that 7 out of 10 consumers who had purchased fixed term or standard annuities would have qualified for an enhanced annuity, prompting it to design the new product.
The products will be available on Assureweb and Avelo Exchange portals. The new launch comes with a 45 days quote guarantee, substantially higher than Living Time and LV =, which offer 14 days and 30 days guarantee respectively.
The annuity product is the first capped draw down launch since the new rules came into effect and the category soon emerge “will emerge as the battleground for innovation”, said Stephen Lowe, group director – external affairs and customer insight at Just Retirement said.
“Unlike the current fixed term annuity products on the market, the customer doesn’t have to wait until the end of the fixed term to get access to the benefits available”, he said adding: “If a customer is eligible for an enhancement on their annuity and chooses to break away from the fixed-term contract, they will be free to shop around for an enhanced annuity using the open market option”.
“This is going to be a game-changer. If Just Retirement can compete on rates, and I have no reason to believe that it cannot, this will be a very attractive proposition”, said Steve Lewis, managing director at The Retirement Partnership.