Enhanced annuity provider Partnership has decided to remove its hybrid annuity drawdown product following it’s tie up with Just Retirement.
The product was launched in September 2015 following a slum in annuity sales after the pension freedoms launch. Partnership weren’t too well diversified and so tried to capture some of the retirees who had abandoned purchasing an annuity in favour or pension drawdown.
Their profits had dropped around 38% following the pension reforms and so the need to design a new product was imperative.
Their product, the Enhanced Retirement Account allowed a guaranteed income (from an annuity) which sat alongside a drawdown fund from Vanguard. Charges ranged between 0.43 per cent to 0.59 per cent for the AMC.
The shift in buyer behaviour and subsequent drop in profits mean a merger with their main competition, Just Retirement, was one of their only options to stay competitive.
Just Retirement were also caught in the change in buying patterns and launched their alternative drawdown based product alongside an annuity.
It has therefore been viewed that the Just Retirement offering, powered by broking technology firm GBST Wealth Management, had more long term appeal.
Existing customers will not be affect and the Partnership product will be pulled from sale on the 12th August.
A spokeswoman for Partnership said: “Following the merger between Just Retirement and Partnership in April, we announced the product strategy, whereby all guaranteed income for life business would be written using the Just Retirement Limited life company.
“We believe blended solutions will be a significant part of the retirement market in the future and we will be working to develop solutions to support advisers and their clients utilising the full capabilities of the combined JRP Group.
At Compare Drawdown, we believe blended solutions do have their place for those seeking out some flexibility but with an underlying guarantee of income. The is an argument that this can be achieved better through choosing the best annuity and best drawdown provider rather than wrapping it up in an offering from the same company.