10th February 2011

LV= urges advisers to revisit drawdown clients before April

• Opportunity to lock clients into a higher income limit for five years through a member nominated review (MNR)
• LV= to waive £60 transaction charge for drawdown clients requesting an MNR

LV= is calling for advisers to review their existing drawdown clients whose plans hit their anniversary before 6 April 2011. Following the legislative changes linked with the removal of compulsory annuitisation at age 75, the maximum income limit for drawdown customers will drop from 120% to 100% of GAD in April. But if advisers act quickly clients could lock into the higher rate of income for up to five years, by electing a member nominated review (MNR).

An MNR is available to clients on the anniversary of the pension fund first being invested into an unsecured pension (USP), and could meana client is able to manage the potential reduction in drawdown income over a five year period, versus simply seeing their income decrease significantly at their next scheduled review. LV= has over 1,200 drawdown clients with an anniversary date in February or March 2011 who could benefit from this opportunity and estimates that between 15% to 20% of all drawdown customers across the market could be in a similar position.

LV= is supporting advisers by proactively contacting them if they have clients that could qualify for an MNR. LV= is also waiving the £60 transaction charge that would normally apply for drawdown customers requesting an MNR, and providing advisers with draft letters and technical support to ensure this opportunity is not missed. Advisers can use an online tool atwww.lv.com/adviser to find out if it is in their clients’ interest to elect an MNR.

Ray Chinn, LV= head of pensions, commented: “This window of opportunity is driven by legislative change rather than consumer or adviser demand, so we want to make sure advisers are made aware which clients could benefit from electing an MNR. It is important to act quickly if an MNR is applicable. In terms of charges, we are waiving the MNR charge so that customers are not disadvantaged by the proposed change in legislation and we would urge other providers to do the same. We suggest that all advisers revisit existing drawdown client files and urgently get in touch with the respective providers to understand what options are open to them.”

Retirement