Prudential to withdraw from annuity market

Prudential said the decision to stop writing new annuities is "due to regulatory and other changes in the retirement market".

It withdrew from the open annuity market in June 2016.

The new comparison service will give customers access to a limited panel of annuity companies from across the market, and will be fully integrated into Prudential's retirement income service for existing customers.

The Prudential annuity panel at launch comprises Aviva, Just Retirement, L&G and Retirement Advantage.

A Prudential spokesperson said: “We have taken this decision due to regulatory and other changes in the retirement market. In launching this service, we still want to ensure that our customers who choose to annuitise are aware of their options and the new service will give them access to a limited panel of annuity providers from across the market.”

Kim Lerche–Thomsen, former Managing Director of Prudential Annuities and Founder and CEO of Primetime Retirement, commented: “This is a sad day as another big name withdraws from the annuity market, it is particularly poignant for me as it is a company I founded and built 20 years ago. Pension freedoms was the catalyst for this as consumers have rightly been given more control and flexibility over what to do with their pension pots. While a lifetime annuity is a good product for later on in retirement, there was a concern that customers were locking into a lifetime annuity as soon as they retired, without being made aware of shorter term options available to them, like fixed term annuities, that could offer them more options and more flexibility whilst retaining valuable income and capital guarantees.
 
“However, it is a concern that the panel of external annuity providers chosen by Prudential is not whole of market. If retirees are to be given a secure option for their precious pension funds it is important they have the full range of options to choose from. Retirement planning is complex and consumers need to think carefully before they do anything that cannot be undone. Expert guidance from intermediaries is at the heart of better financial outcomes in retirement and key to helping retirees enjoy their future and enabling them to have the means to do so.”