ROYAL London, the UK's largest life insurance mutual, has become the first big pensions provider to launch its own annuity service.
The group, which recently scrapped the Scottish Life pensions brand but is a major employer in Scotland, came under fire last week from pensions campaigner Dr Ros Altmann over an annuity sale. Royal London referred a policyholder, a 62-year-old man with a heart complaint undergoing tests for cancer, to its annuity provider Prudential which provided him with a regular annuity rather than the enhanced version he was eligible for.
Dr Altmann acknowledged neither company had broken any rules but noted Royal London received 2.5 per cent commission on every annuity sold by Prudential, and it had failed to refer the customer to any source of advice. Prudential subsequently annulled the transaction.
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Royal London, which declined to comment on the episode last week, said yesterday it had set up a partnership with specialist adviser Just Retirement to provide a service for its four million direct customers who did not have a financial adviser as they approached retirement. Customers would be able to compare "both standard and enhanced annuities from 10 leading annuity providers, including Prudential".