The Enhanced Retirement Account (ERA) was unveiled in September 2015 just months after the UK’s pension freedoms came into force.
The product allowed a guaranteed income held alongside the ability to invest in Vanguard funds with charges ranging between 0.43% and 0.59%.
However, since British annuity providers Just Retirement acquired Partnership for £1.4bn ($2bn, €1.8bn) in April, the firm has decided to pull the ERA, effective from 12 August.
A spokesperson for Partnership said the withdrawal is a result of a new product strategy in the wake of the merger that will see all Guaranteed Income for Life (GIfL) business would be written by Just Retirement.
“An exception to this at the time was that Partnership would continue to offer the Enhanced Retirement Account (ERA) product whilst our product integration work continued. The decision has now been taken to withdraw the ERA from the market with effect from 12th August 2016.”
The company added the existing clients would be unaffected by the changes.
Plummeting sales
Since 2014, both Partnership and Just Retirement have suffered plummeting share prices and sales of annuities as George Osborne announced reforms granting unrestricted access to pension savings – scrapping the need for people to buy an annuity.
Coupled with low interest rates many people have since sought out alternatives to annuities such as drawing down income from their pension pots.
Annuity sales in the UK plunged 42% from £11.9bn in 2013 to £6.9bn in 2014. Just Retirement suffered a 56% fall in individual annuity sales in the year to June, while Partnership confirmed sales fell by half during 2015.
