Scottish Widows has announced they are to start offering Enhanced Annuities .
The move comes after the pension provider estimated 45% of its pension investors could qualify for an Enhanced Annuity due to on-going medical conditions.
The Scottish Widows Enhanced Annuity will be available to all would-be retirees, not just existing customers and will have a minimum purchase price of £5,000. The Annuity will be available with all the usual options for retirees looking to include guarantees, spouse’s pensions and indexation.
Mike Teall, Head of Annuity Propositions at Scottish Widows, said: “The enhanced annuity market will be worth nearly £6bn this year and is expected to grow but up to 10 per cent yearly due to an ageing population and baby boomers reaching retirement.” (Source: FTAdviser)
Retirement experts, who have welcomed the move by Scottish Widows, are optimistic the added competition, in a market place dominated by a handful of Annuity providers, will benefit retirees.
Calls for compulsory Annuity broking
The announcement from Scottish Widows comes in the same week that Labour called for new Annuity rules to be introduced.
Concerned that members of work place pensions are getting a poor deal when they retire, Labour want the Government to introduce new rules which will force pension schemes to introduce retirees to “the best independent brokerage service available”.
Greg McClymont, Labour’s shadow minister for pensions, said: “More and more people are waking up to the scandal of annuities rip offs, but ministers are still sitting on their hands.”
“Savers can lose a fifth of their pension income because the market simply isn’t working. Ministers must now act on private pensions and ensure that there is fairness in the system – including in the purchase of annuities.”
“It should be part of the duties of pension schemes to direct their savers to the best independent annuity brokerage service available or to offer such independent brokerage services themselves.”