"With Solvency II capital requirements further depressing annuity rates, we no longer feel our enhanced annuities provide good value for customers."
The proposed move follows a review of its annuity business and changes in retirees’ buying habits since the pension freedoms as well as the current interest rate and regulatory environment.
LV= says it has seen increased consumer demand for secure drawdown solutions such as fixed term annuities as well as guaranteed funds and wider income drawdown products.
LV= confirms it will continue to offer standard and enhanced annuities from other providers where they are the right option for consumers via its various advice solutions. It will also look to offer annuity solutions from potential partners that are interested in being part of LV=’s blended propositions, including its Retirement Account.
John Perks, Managing Director of Retirement Solutions at LV=, said: “The pensions market has changed considerably over the last 18 months. Instead of viewing retirement as a one-time event, people are increasingly looking at shorter time horizons and seeking more flexibility in their retirement income.
“In an ongoing low interest rate environment and with Solvency II capital requirements further depressing annuity rates, we no longer feel our enhanced annuities provide good value for customers. We believe it makes sense, therefore, for LV= to focus on a mixture of safe drawdown products, fixed term annuities, guaranteed funds, investments and equity release.”
