Fidelity plans to enter enhanced annuity arena

Fidelity plans to offer access to an enhanced annuity via its defined contribution (DC) platform.

Julian Webb, DC business development director at Fidelity, said the arrangements are not yet concrete but developments are likely to go ahead this summer.

The plans come after several other providers announced intentions to add enhanced, impaired life or fixed term annuities to their range.

Just Retirement and Aviva are planning new product launches this year, whilst Legal and General is researching the area and LV= plans to adjust its existing fixed term offering due to market competition.

"This is the start of a journey, and that journey began with our DC business where we offer a conventional annuity outsourced to Canada Life," said Webb.

"Within the DC platform, we are looking to extend the proposition with an enhanced annuity sometime over the summer with a different provider.

"We took the decision to do this because DC pots are growing, and investors are demanding more choice for deccumulation."

Webb added Fidelity will look into adding an impaired life annuity next year, and will later investigate adding enhanced and impaired options via FundsNetwork, its retail platform.