Question
What do you think of "Just Retirement" as an annuity provider? I am nervous about using one which is not a big insurer. Are they covered by the FSCS?Answer
Just Retirement certainly can't compete with the large insurers when it comes to size, but they seem to have carved a niche for themselves in the 'enhanced' annuities marketplace - i.e. where your health or lifestyle might shorten your life expectancy. They also seem to do brisk trade in equity release mortgages and are no minnow, making an operating profit of £121 million last year.
If Just Retirement can offer you a competitive annuity rate then I'd be fairly relaxed about using them. It's not out of the question that they'd go bust, but I think it's unlikely. My biggest reservation is that the business is funded by venture capitalists, who might be reticent to pump money into the business to try and save it if things did go wrong.
In any case, Just Retirement annuities are covered by the Financial Services Compensation Scheme (FSCS), so you should get some protection if they did go bust. In such an instance the FSCS would probably look to transfer the annuity to another provider on the same terms, in which case you should notice little difference except for a possible delay in receiving income will the process take place.
Otherwise you’d claim for the equivalent lump-sum value of your annuity based on the cost of a new policy to provide the same level of income and benefits (such as joint life cover and indexation). You would then expect to receive 90% of this value with which to purchase a new pension annuity.
Of course, FSCS rules and levels of cover could change in future, but I think it’s unlikely cover for annuities would fall.
What do you think of "Just Retirement" as an annuity provider? I am nervous about using one which is not a big insurer. Are they covered by the FSCS?Answer
Just Retirement certainly can't compete with the large insurers when it comes to size, but they seem to have carved a niche for themselves in the 'enhanced' annuities marketplace - i.e. where your health or lifestyle might shorten your life expectancy. They also seem to do brisk trade in equity release mortgages and are no minnow, making an operating profit of £121 million last year.
If Just Retirement can offer you a competitive annuity rate then I'd be fairly relaxed about using them. It's not out of the question that they'd go bust, but I think it's unlikely. My biggest reservation is that the business is funded by venture capitalists, who might be reticent to pump money into the business to try and save it if things did go wrong.
In any case, Just Retirement annuities are covered by the Financial Services Compensation Scheme (FSCS), so you should get some protection if they did go bust. In such an instance the FSCS would probably look to transfer the annuity to another provider on the same terms, in which case you should notice little difference except for a possible delay in receiving income will the process take place.
Otherwise you’d claim for the equivalent lump-sum value of your annuity based on the cost of a new policy to provide the same level of income and benefits (such as joint life cover and indexation). You would then expect to receive 90% of this value with which to purchase a new pension annuity.
Of course, FSCS rules and levels of cover could change in future, but I think it’s unlikely cover for annuities would fall.
Read this Q and A at http://www.candidmoney.com/questions/question515.aspx
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