Genetic tests could be used to determine the value of enhanced annuities within six years, once they receive government backing.

The possibility is fresh on the agenda after a new over-the-counter test was unveiled by Life Length, a company that measures the length of telomeres – a piece of DNA that prevents chromosome degradation – to gauge how fast a person is ageing.

The care sector is too reliant on the insurance industry to provide funding solutions and stakeholders from the wider financial services industry should be encouraged to assist, according to economist Andrew Dilnot.

The National Employment Savings Trust (Nest) has pledged to focus on educating members on the different shapes of annuities available, before offering its retirement income panel.

Heath Lambert Private Clients (HLPC) is taking its direct to consumer (D2C) message to the market with the launch of its online annuity service.

The service is designed to become a one-stop shop for those facing retirement and seeking an annuity quote.

The Law Commission’s response on Adult Social Care has been widely commended by care specialists in the UK.

The first derisking exercise using enhanced annuities for senior staff is expected to emerge within weeks.

Partnership, the leading specialist in providing annuities for those with impaired health or those with unhealthy lifestyles, is in talks with employers carrying out enhanced transfer exercises (ETVs).

Enhanced annuities, as well as enhanced transfers, will be offered as an option by IFAs to individuals over the age of 55.

PE-backed venture

Insurance entrepreneur Mark Wood has strongly indicated a venture using private equity backing to develop a new way of drawing from equity release to aid retirement.

Drawdown error

Martin Lewis has come under fire from financial advisers for appearing to mislead viewers on ITV’s Daybreak show on February 15.

JPMorgan’s handover of its Riskmetrics Index to the Life and Longevity Markets Association (LLMA) will proceed, despite the bank losing a key figure in the deal.

Guy Coughlin headed JPMorgan’s Pensions Advisory Group and was responsible for transferring ownership of the index – which can be used to create non-bespoke longevity swaps – to the trade body, but he left at the end of last year.

The cost of annuities is likely to double on the back of revised government population estimates, figures reveal.

Current average annuity rates of around 6% provide £6,000 a year from a pension pot of £100,000 – half as much as the same pot would have provided 20 years ago.

Almost all Independent Financial Advisers (IFAs) believe falling annuity rates will lead to an increase in demand for unconventional annuities, according to new research.

Reliance Mutual is set to expand the conditions for its smoker annuity product next year, the company has confirmed.

Philip Bowden, head of strategy implementation at the firm, said the updated product, due to launch in 2011, will take into account additional health conditions when setting annuity rates.

However, the product will still be offered only to smokers.

Confused.com has “stolen a march” on rival GoCompare by beating it to creating an online annuity comparison service, according to its partners at Jardine Lloyd Thompson (JLT).

LV has claimed a major blow on rival Living Time in the fixed-term annuity market, announcing it has outstripped targets for its Protected Retirement Plan by 25%.

Changes proposed by the coalition government to end compulsory annuitisation at age 75 have been warmly welcomed by industry commentators.

John Moret, sales and marketing director at Suffolk Life, said it was good news for investors in general, and in particular the wealthier client.

“There is more flexibility for the middle market and a chance to structure income in retirement so it more accurately reflects likely expenditure patterns,” he said.

GoCompare is planning a move into annuity evaluation, the first major price comparison site to do so.

Without setting a timeline, the website has expressed a strong interest in the market and told PM it believes it can “add value to consumers” by taking advantage of open market option (OMO) rules.

GoCompare, which currently gives two million general insurance quotes a month, is also toying with personal pension price comparison.

Business development director John Miles said: “We don’t have a date, but we will definitely look to promote consumers’ use of the OMO.”

Solvency II will prompt a raft of asset-backed annuities to hit the market, with Legal & General (L&G) preparing the release of its own product.

Lifetime annuities will remain the most popular retirement option over the next five years, according to research from Xafinity Paymaster.

The administrator’s research – which polled 50 insurers, service providers and annuity influencers – showed 90% believed lifetime annuities will be chosen by the majority of retirees, despite the increased range of annuity products available.

Respondents claimed most annuitants will have small pots and need to secure a retirement income, but the more flexible products were also seen to be “too expensive” and “too sophisticated” for many consumers.

Industry commentators have welcomed the government’s consultation on removing the obligation to annuitise by age 75, but warn the proposals for a minimum income requirement (MIR) must be exercised fairly.

Solvency II will prompt a raft of asset-backed annuities to hit the market, with Legal & General (L&G) preparing the release of its own product.

The new service matching small pension pots with annuities would favour working on a fee-based model, but has taken the commission route due to pressure from life offices.
Annuity Clearing House (ACH), which was first mooted last May, has finally launched, with the aim of allowing independent financial advisers (IFAs) to find annuities for clients with pots as small as £1,000.
The service will provide commission levels of between 1.1% and 1.7% for intermediaries who can process annuities in as little as seven minutes.

The further decline of annuity rates will hinge on the gilt market reaction to June’s emergency Budget, advisers have been warned.
Falling bond yields, increased longevity and Solvency II regulation are predicted to take their toll on already dampened rates.
Tim Whiting, director of Alexander Forbes Annuity Bureau, said: “The reaction of the gilt market to the Budget and any changes in the outlook for interest rates will quickly tell us whether annuities will continue their downward trend for 2010.”

The industry has reacted strongly to rule changes following last month’s increase in the normal minimum pension age from 50 to 55.

More than 70% of insurance groups cite preparing for Solvency II as the top concern for their risk management operations.

The new government’s commitment to removing compulsory annuitisation at age 75 has been warmly welcomed by the industry.

The number of savers predicted to buy an annuity and its impact on the defined benefit (DB) market is vastly exaggerated, L&G Investment Management (LGIM) has claimed.

MetLife’s purchase of Alico, the non-life assurance business, from AIG will have little impact on Living Time, according to chief executive Kim Lerche-Thomson.

Equity release products are winning over an increasing number of independent financial advisers (IFAs), although suspicions about the proposition still remain.

MGM Advantage has officially launched its long-awaited flexible asset-backed annuity.

Living Time has praised LV for its new fixed-term annuity, after it became only the second company to launch such a product in the UK.

The annuity market is set to “explode” with new products and providers, according to this month’s survey.

Axa has become the first annuity provider to defer a product launch because of concerns about the possible effects of Solvency II legislation.

Tom McPhail used his keynote speech at this year’s Pensions Management Retirement Summit to highlight the failure of providers to promote the open market option (OMO).

McPhail, chairman of the Pensions Income Choice Association (PICA), called for universal acceptance of the OMO from all sectors of the pensions industry, to help retirees capitalise on the range of options available.

Continued innovation in the annuities market could still fail to provide for the lower end of the market, according to PM research.

Investment-linked products such as income drawdown are becoming more accessible to those with smaller pension pots, according to new research.

The credit crunch is forcing financial advisers to rethink their approach to income drawdown and other risk-based products, according to responses to PM’s forthcoming income drawdown survey.

The only reason a UK resident should take up a qualifying recognised overseas pension scheme (QROPS) is for the death benefits, an overseas pensions specialist has warned.

The Financial Services Autho-rity’s retail distribution review (RDR) has attracted tentatively positive feedback from respondents to PM’s annual lifetime annuities survey.

Annuity transfers now take an average of eight calendar days thanks to the Options initiative, the Association of British Insurers (ABI) has said.

Hartford’s exit from the UK variable annuity market could kick-start product innovation from its former rivals.

The announcement that Hartford Life is to withdraw from the UK market has received mixed responses from industry specialists.

Hartford Life has suspended its retirement and investment business in the UK, citing turbulent markets as the catalyst.

The annuity industry is “wholly failing” retirees due to lack of product innovation and the low uptake of the open market option (OMO), market experts have declared.

The unpopularity of with-profits annuities has led providers to shun the term in preference of less specific titles.