Advisers say Widows' annuity return good for consumers

IFAs have welcomed Scottish Widows’ plan to re-enter the IFA annuity market as a move they said will boost competition in the sector.

Today Widows announced its plans to re-engage with the IFA annuity market, and is considering a similar strategy for the IFA protection market.

Billy Burrows, director of Better Retirement Group, said: "There are currently only three or four players in the non-enhanced annuity space, so any entry to the market is a good thing."

Alan Higham, director of Retirement Angels, said: "I am pleased to see more providers in the marketplace as it will increase competition between annuity providers.

"That competition will also mean Widows' own customers, some of whom do not shop around for an annuity, will get a better outcome.

"Widows could be doing this because of the bad publicity lately around insurance companies not giving good annuity rates to customers who roll over, but all life companies are aiming to retain business, such as Friends Life."

In November, Friends Life said it would ramp up its retirement offering for internal customers and then on the open market over the coming year.

However, Higham added Widows' entry into the intermediary annuity market might not sit well with Bank of Scotland (BOS) Annuity Service, part of BOS Private Clients, which, like Widows, is owned by Lloyds Banking Group.

"BOS is one of the biggest writers of annuities in the UK, so this will be an interesting set-up. What is the future of BOS Annuity Service?" he said.

Katherine Oxenham, business development director at Annuity Direct, also welcomed the move.

However, she added: "I would be interested in seeing more detail about their plans, especially for adviser charging, and hope they are mindful of the comments and suggestions made in this weekend's National Association of Pension Funds (NAPF) report on pension annuities."

This week, the NAPF report claimed "unfair" annuity sales, "murky pricing" by insurers and a lack of shopping around was costing new annuitants £1bn in future pension income per year.