Standard Life launches new individual annuity to meet increasing desire for a guaranteed income in retirement

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• Certainty of income in retirement is important to over three quarters of people
• The Standard Life Pension Annuity meets this need, providing a guaranteed income that lasts as long as you do
• Annuity rates risen 20% in the last year – offering increased value to pension savers
• Benefit options ensure annuities are tailored to specific needs - including inflation-linked payments and value protection

Certainty of income in retirement is important to over three quarters (78%) of people, and over half (58%) worry about running out of money in the future¹. It is with this in mind that Standard Life, part of Phoenix Group, today announces the launch of the Standard Life Pension Annuity, designed to meet this increasing need for certainty and security among those approaching or at retirement.

It can be tricky for people to plan for retirement and know how long their savings will need to last, given market volatility, economic uncertainty, and the fact that life expectancy can be difficult for people to predict. The flexibility offered by drawdown remains an attractive option for many, but with investment returns not guaranteed, there is a risk of running out of money without effective planning. An annuity offers pension savers a solution - providing a regular, guaranteed income that lasts as long as you do.

Available on the open market to both new and existing Standard Life customers, the Standard Life Pension Annuity (the Annuity) is aimed at customers aged between 55 and 75 who are looking for a guaranteed income for life from their pension savings. It is available through both advised and non-advised routes, including industry quote comparison portals and leading specialist annuity brokers.

Claire Altman, Managing Director for Individual Retirement at Standard Life, commented: “It is an exciting time to be launching a new guaranteed income product on the open market. Annuities are increasingly better value, with current rates improving by 20% in the last twelve months, as of June 2023². In an uncertain economic climate, in which three quarters of people say they want income certainty in retirement, the guaranteed income offered by an annuity is likely to be an ideal solution for many. I think people are beginning to see this value, with the first quarter of this year proving to be the highest quarter for annuity sales since the pension freedoms³.”

The Annuity is fully medically underwritten, designed to help ensure those suffering from lifestyle and/or medical conditions get more for their money, as well as for people who are in good health. It offers a wide range of benefit features⁴ that are typical in the annuity market, including inflation-linked options, and value protection, which provides a death benefit to a customer, ensuring their investment is returned to their beneficiary (less any income taken). Customers may also consider purchasing a guaranteed period for up to 30 years, which secures a regular income for a customer’s beneficiaries or dependents if anything should happen. This is agreed for a fixed period of time, giving customers confidence their loved ones will be looked after.

Claire continued “When purchasing an annuity, it is important to be aware that they come with many different options, or benefits, which can be used to shape the income you receive. It is worth considering whether benefits such as value protection or a guaranteed period would provide further peace of mind to you and your family. Through enhanced annuities, the income you can receive is also increased as a result of any medical conditions you may have, so it pays to provide a full health disclosure when looking at the best options available on the market.

The Standard Life Pension Annuity, which is manufactured by Phoenix Group and distributed under the Standard Life brand, has been launched amid growing awareness around how blended retirement income solutions can offer the best of both worlds – security and flexibility.

Claire said: “Retirement income doesn’t have to be a binary choice between drawdown and annuities. Two thirds (68%) of people say they would like a guaranteed income to meet their essential expenses, together with some income remaining flexible for non-fixed expenditures¹. By purchasing an annuity in combination with other solutions, such as drawdown, we can meet this desire for potential flexibility and certainty, allowing people to enjoy the best of both worlds. Purchasing later in retirement, or in stages, also allows someone to benefit from the way that annuity rates generally improve with age.”

“We are committed to helping all our customers achieve the best possible outcomes in retirement, and we believe guaranteed income has an important role to play as part of a wider toolkit of solutions that can help people manage their retirement savings and delivers certainty together with flexibility and potential growth. The Standard Life Pension Annuity has been launched with this in mind, amid growing awareness of how guaranteed income can complement other retirement solutions.”

ENDS

Notes to editors:

For further information about the Standard Life Pension Annuity, please see https://www.standardlife.co.uk/adviser/retirement-income/pension-annuity

1- Standard Life Retirement Voice 2022

2- Annuity rates data provided by AMS Retirement, up to June 2023. Annuity rates improved by 20% in the twelve months to June 2023, with a total increase of 48% since the start of 2022 for a 65-year-old.

3- ABI figures for Q1 2023 confirming Q1 2023 was the highest quarter for annuity sales since pension freedoms – Quarterly New Long-Term Business Overview (Q1 2023)

4- The Standard Life Pension Annuity – key product features and options:

Product feature/option	Availability within Standard Life Pension Annuity
Product options	Open Market Option (OMO) or Immediate Vesting Personal Pensions (IVPP)
Age range	For customers aged between 55-85 for OMO (younger ages may be eligible if for early ill health or protected retirement age) For customers aged between 55-75 for IVPP option
Premium size required	Minimum £10,000 min (after PCLS/adviser charge). No maximum
Intermediary remuneration	Commission (for non-advised). Adviser Charge (for advised)
Enhanced rates	Fully underwritten healthy and enhanced rates available
Joint life option	0-100% named dependant or any-spouse
Death benefit options: Guarantee Periods Value Protection	0 – 30 years. (Choose to Guarantee Income payments for up to 30 years from the plan start. If the plan holder dies within the guaranteed period, option for the estate to choose a beneficiary to receive the remaining payments). 0-100%. (Choose Value Protection of up to 100% of the premium paid. A lump sum equal to the percentage of Value Protection selected, less the income payments already made).
Escalation (increasing payment options)	0-10% fixed escalation (fixed rate increases, up to 10%, each year) Retail Prices Index (RPI) increases each year Limited Prices Index (LPI) increases (RPI increases up to a maximum of 5%) each year
Payment frequencies	Monthly, quarterly, half yearly or annually, payable in advance or arrears
Quote Guarantee	14 days to submit application, plus 30 days to receive funds

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About Standard Life

• Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years.
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
• Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together.
• Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs and plan a future they feel confident about.
• Standard Life is the proud headline sponsor of Race for Life, Cancer Research UK’s flagship fundraising event series.