Annuity Rates, Annuities, Pensions, Divorce Annuity Rates Charts
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources

5 December 2016 last updated

Liverpool Victoria exits market after fall in impaired annuity sales

Impaired annuity provider Liverpool victoria has exited the market as sales of impaired annuities continues to fall in 2016 following the pension freedoms and record low rates after the EU Referendum.

The after being a leader in the impaired annuity market Liverpool Victoria has taken the decision to stop offering enhanced ill-health annuities.

As with standard annuities, these ill-health plans pay a guaranteed enhanced income for your lifetime in exchange for a pension fund and based on medical conditions that reduce life expectancy.

This can often increase the income received by 20% to 40% depending on the severity of the personal circumstances such as diabetes, heart and cancer conditions.

Less serious conditions can also qualify such as lifestyle conditions such as high blood pressure, high Cholesterol, height & weight, smoking and alcohol consumption.

The departure of Liverpool Victoria comes after Standard Life and Aegon announce they will also exit the annuities market.

Liverpool Victoria exits impaired annuity market
  Falling rates and sales convince providers like Liverpool Victoria to exit impaired annuity market
  More annuity topics
  Quarter 4 News 2016
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Downward trend of enhanced annuity sales

Following George Osborne's March 2014 announcement of the new pension freedoms the sale of all annuities decreased significantly including enhanced annuities for lifestyle conditions and impaired annuities for more severe medical conditions.

Compared to the first quarter of 2015, sales of enhanced annuities reduced by 29% from £357 million to £254 million according to data from Willis Towers Watson.

The decision of Liverpool Victoria to exit the market is more involved than just lower sales. It was firstly due to the the pension freedoms impact on the enhanced annuity market, taking away the compulsion for people to use their pension fund to buy an annuity.

Secondly it was due to the record low interest rates reducing the 15-year gilt yields, in particular after the EU REferendum and resulting Brexit vote. Thirdly tougher capital adequacy requirements introduced by Solvency 2 further reduced the level of annuity that can be offered and offering poor value to people at retirement.

Changing market at retirement

The changes since pension freedoms were announced have produced record low annuity rates and our benchmark example for a 65 year old with £100,000 buying a single life, level annuity has seen income reduce £1,447 pa or 23.5% from £6,143 pa in June 2014 to £4,696 pa in August 2016.

Liverpool Victoria no longer see retirement as a one-time event resulting in an annuity but rather as a series of shorter term events requiring greater flexibility.

Flexibility is offered by other products such a fixed term annuity or flexi-access drawdown where an income can be selected and the pension fund reviewed in the future and accessed. This is different from a lifetime annuity where the fund is exchanged for an income.

In addition Liverpool Victoria also see equity release as an important part of their business as people with equity in their properties can access this as cash while remaining in their own home.

Annuities are capital intensive for life companies when compared to other options and if sales continue to fall other providers may consider an exit from the market reducing competition and value for people at retirement.

Even so the impaired annuity does offer higher income levels, 20% to 40% higher than the standard rates and a secure guaranteed income for life which many people are looking for.

News related stories:
Drawdown popular as UK annuities fall up to 24% over the last year
Pension annuities lower after Brexit vote and Bank of England action
Annuity rates down 10% since pension rule changes announced
Radical changes to pension annuities in Chancellor's Budget
Annuity Rates
  Age Single Joint  
  55 £4,574 £4,142  
  60 £4,961 £4,610  
  65 £5,691 £5,238  
  70 £6,478 £6,098  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
  Annuity Rates  
Annuity Quotes
  Plan your annuity and get quotes from the 12 leading providers  
  free annuity quote Free Annuity Quotes
  annuity quote no obligation No Obligation
  annuity quote all providers From All Providers
  Annuity Quote  
  Annuity Rates News:

Annuity rates rise due to inflation fears
Gilt yields rise over 2pc 15-year gilt yields are up 28 basis points as investors expect rise in base rates
Annuity rates soar 19pc to high for 6 years
Annuity rates soar19% Annuity rates reach a six year high up 19% since January 2021 as gilt yields rise
Gilt yields rise 20 basis points
Gilt yields rise 20 basis points Federal Reserve to raise rates more aggressively with gilt yields up to 1.82%
Annuities are at a 3 year high
Pension annuities could fall with Omicron variant Higher gilt yields sends annuities to a three year high up 11.1% in the last year
Pension annuities rise 9pc over a year
Pension annuities rise 9pc Pension annuities rise almost 9pc as yields increase ahead of higher base rates

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page   This website is for marketing purposes only and does not provide specific financial or legal advice. Website security issued by GeoTrust and Equifax. Copyright©2001-22 All Rights Reserved