Article for New Model Adviser: Urgent action needed to overcome stagnation in annuity market
02/03/2014 | Download PDF
Article for New Model Adviser, March 2014 - Adam Wrench, Head of Business and Product Development at London & Colonial, calls for urgent action to overcome stagnation in the annuity market.
“The recent forecast by the British Chambers of Commerce that GDP growth is expected to rise to 2.8% during 2014 should be welcomed – as it is certainly a step in the right direction. However if you were writing a school report on such a performance, it would probably read ‘satisfactory, could do better’.
The very fact that even an exceedingly modest increase in projected performance is greeted so enthusiastically in some quarters, highlights the still relative fragility of the current economy. It is a time of both economic and investment uncertainty, and it is against this background of uncertainty that thousands of people approaching retirement are unfortunately having to make a decision when selecting their annuity – a decision they will have to live with for the rest of their lives.
My personal belief is that ‘Lock in deals’ should be confined to the scrapheap of financial product history and the sooner all annuity providers start to appreciate that potential annuitants do not just want, but richly deserve, the freedom of an open annuity the better.
All annuities should be able to provide a life time income without “the handcuffs”, with a flexible structure that ensures the best possible returns throughout the whole of an annuitant’s retirement. Just like any investment portfolio it is important that it be reviewable on a regular basis and where found to be lacking, as a result of any changed circumstances such as deteriorating health or a change of personal situation, then it should be reviewed with a view to possible switching to a more suitable product.
The current financial and investment climate may look very different in 5 years’ time and annuities should be structured accordingly, so that they are completely flexible and able to adjust to any potential changes, so enabling advisers to offer their clients a continually reviewable and adaptable solution to suit the individual’s retirement needs.”
For more information, please contact:
Matt Godwin London & Colonial 020 3479 5505
Fiona Bond Holt PR 020 8334 8354
Notes to Editors
About London & Colonial
London & Colonial specialises in self-invested products for both UK residents and persons resident overseas.
The London & Colonial Group includes
(1) London & Colonial Holdings Limited – UK parent company
(2) London & Colonial Services Limited which is regulated by the UK Financial Services Authority and operates SIPPs and SSASs
(3) London & Colonial Assurance PLC which is regulated by the Gibraltar Financial Services Commission (matching UK standards) and which offers Open Annuities, QROP Annuities and Open Offshore Bonds
(4) L&C (Administration Services 2) Limited and London & Colonial (Trustee Services) Limited which are both based in Gibraltar and offer the EU SIPP.