Pensions  

LV= considers blended annuity launch

Insurer LV= is considering launching a new type of annuity that combines lifetime certainty with a limited amount of investment risk.

Steve Lewis, head of distribution for retirement solutions, said at a retirement income round table today that it is considering alternative annuity types for the coming year.

“One of the things we are looking closely at is doing an 80:20 plan,” he said, explaining that such a set-up would see 80 per cent allocated to a lifetime annuity and 20 per cent in an investment-linked arrangement.

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It would allow annuitants to have some level of certainty while still taking on some investment risk for potential growth, Mr Lewis added.

“A little bit of risk is not a bad thing,” he said. “We have got both products, what could we do? It is the middle market of what you might call portfolio solutions.”

Mr Lewis said LV= is not a fan of ‘third way’ annuity products but that a ‘mix and match’ approach is being taken by many advisers, with products blended together to create an overall solution.