Standard Life pulls out of open annuity market

The provider is still offering in-house annuities, as is Prudential who withdrew from the open market in June.

Aegon announced that it would offer in-house annuities through L&G as its ‘preferred annuity supplier’ in September.

Partnership Assurance withdrew following its merger with Just Retirement in April 2016, and Friends Life withdrew following the merger with Aviva in April 2015.

Eight providers now remain in the market: Aviva, Canada Life, Hodge Lifetime, Just Retirement, Legal & General, LV=, Retirement Advantage and Scottish Widows.

Tom McPhail, Head of retirement policy at Hargreaves Lansdown, commented: “Standard have not been an active, competitive player in the open annuity market for some time; over the past year they have accounted for less than 1% of business through our open market annuity broking service. There is no evidence this decision is linked to the recent announcement that they are being investigated by the FCA in respect of their past annuity sales.

"It appears a combination of both commercial and regulatory pressures are driving companies to focus their energies on those markets where they can genuinely offer customers good value for money. This is now the sixth annuity provider lost to the open market since the launch of pension freedoms. The good news for consumers is there is healthy competition among the remaining eight companies in the market and demand for annuities is now stabilising post pension freedom, with around 20,000 sales per quarter.”