Canada Life has today (23 January 2024) closed its onshore bond (Select Account), and personal pension plan (The Retirement Account) to new business, with immediate effect.
Canada Life has said it has identified significant growth opportunities in the UK offshore bond market, and will target resource in this area moving forward. The company has also confirmed it remains committed to the UK market where it can operate at scale and be competitive, including in the areas of individual annuities, equity release, group protection, bulk purchase annuities and asset management, alongside the UK offshore bond space.
Sean Christian, MD and Executive Director for Wealth at Canada Life UK said: “We’ve always said we will compete where we can reach scale and be competitive, and it has become clear we need to take the decision to close these products, which represent less than 1% of our customer base.
"While we recognise this will leave some advisers disappointed, it does mean we can focus on areas of profitable growth, where we can leverage our resource to deliver a better experience for advisers and their clients, including our market-leading UK offshore bond range, via our businesses in the Isle of Man and Ireland.”
“We see significant potential to grow our market share in the offshore space via UK advisers, where we think the market is presently underserved. This is being driven by growing demand for clients to consider broader planning opportunities, given the UK’s high tax burden and ever-changing legislative environment. We look forward to working with a wider range of advisers to show the value of our range of investment, trust, and estate planning solutions.”
Canada Life explained the closure of the onshore bond follows a trend of an overall decline in the market, with advisers preferring open-architecture products available on platforms, alongside the relative attractiveness of other tax wrappers and savings options.
The personal pension remained a small and niche product in a very competitive market segment, and would require significant additional investment to generate the sales volumes required to make it profitable.
The offshore bond will continue to be actively marketed and sold, from both the Isle of Man and Dublin, with no changes to the product or overall proposition.
It intends to close to new business while we enter a period of consultation with impacted employees.
There is no change for existing customers who invest in either the onshore bond or The Retirement Account, with all product features currently available continuing.
Canada Life further said any pipeline business which advisers chose to complete will be honoured for both onshore bonds and The Retirement Account, within any quote guarantee periods.
The onshore bond has around 17,000 customers, while The Retirement Account has attracted around 5,000 customers since launch in 2015. Half of the customers using The Retirement Account are using it as a flexible annuity only. In total, these customers represent less than 1% of Canada Life UK’s overall customer base.
