Demand for fixed-term annuities is on the rise, with application numbers increasing by 71 per cent between April and May, according to LV=.

The company reported that it had seen 197 applications for fixed-term annuities in May, compared to 115 in April and 112 in March.

In terms of annual premium equivalent, LV= received £1.6m from applications during May, up from just £0.9m the month before.

Prior to lockdown, LV= received 87, 68 and 41 applications in December, January and February respectively.

The pension provider claimed that the rise in demand was being caused by fears about coronavirus and investment market turmoil, which it said has left advisers and retirees searching for safe havens.

LV= managing director of savings and retirement, Clive Bolton, commented: “The coronavirus outbreak and volatility in investment markets is worrying many savers who are approaching retirement or drawing an income from their pension fund.

“Many want security and fixed term annuities are useful solutions to consider in helping customers who like certainty and need to make decisions about their retirement but who aren’t ready or able to make long-term commitments.

“Although drawdown is hugely popular, savers in drawdown run the risk of running out of money in retirement. An alternative, which has become increasingly popular over the past few weeks, is a fixed term annuity.”

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