Scottish Widows has launched its standard annuity to the open market as it also publishes research showing 56 per cent of advisers say they often see clients underestimating how long they will live for.
The launch means both Scottish Widows’ standard and existing enhanced annuity are now available on the open market.
The provider has also created a new annuity calculator pricing tool which responds quickly to market pricing changes, providing advisers with up-to-date quotes to offer their clients. Scottish Widows says it aims to offer the most competitive rates.
The standard annuity is also available via third party portals including Iress, Ipipeline, Annuity Exchange, Retirement Line, Tomas, and Synaptic Webline. Hargreaves Lansdown will continue to only offer the enhanced version.
The provider’s research found 34 per cent of financial advisers say that helping clients plan ahead for their financial future is becoming increasingly complex, while 80 per cent say their clients underestimate how much they need to save in retirement.
The average life expectancy in the UK is now 87 years, yet the average adult expects to retire at 65 and live to just 82. When advisers tell clients they’re underestimating their life expectancy – and should therefore increase their savings contributions – 46 per cent listen and reconsider their financial planning, while 22 per cent think they know better than their adviser about how long they will live for, and 23 per cent think they will die earlier than the national average life expectancy.
Scottish Widows director of annuities Emma Watkins says: “Retirement planning isn’t a ‘one-size-fits-all’; that’s why we remained committed to the annuities market – while many providers withdrew – because it’s important to us that we continue giving advisers a range of options to offer their clients.
“As fewer people approach retirement today with defined benefit pensions, annuities continue to have a role to play – for the right people in the right circumstances – as they can give peace of mind that essential expenditure will always be paid, irrespective of any market volatility.
Emma Watkins, Director of Annuities at Scottish Widows, said: “Life expectancy has grown substantially in the last 60 years and now one in 10 people will live to be 100. We know this is creating new challenges for advisers, as they are having to help clients who could be vastly misjudging the costs of a longer retirement.
“We believe it’s important for people approaching retirement to have access to a range of options on how to access their retirement savings, and that’s why we’ve remained committed to the annuities market while others have withdrawn over the last few years. It’s also why we’re giving advisers the option of comparing our product with other providers, as it gives their clients more choice.”