Aviva has entered the fixed-term annuity market with a five year and ten year plan.
The fixed term retirement plans provides two investment options. The low-risk option provides a guaranteed maturity value while the second option provides a money-back guarantee, but has the potential for greater investment growth and with it more risk.
At the end of the fixed term, investors can use the remaining pot to buy a new annuity or go into drawdown.
The insurer said the new product is a useful tool as investors increasingly phase out work rather than retiring completely.
"We know through our customer research and regular Real Retirement Reports that the retirement market is changing rapidly," said Clive Bolton, at retirement director at Aviva.
"No two people are alike and individuals are approaching retirement with very different ideas about how they would like to spend their life after work."
Aviva's product is the latest in a series of fixed term products to enter the market as investors attempt to avoid locking into a poor annuity rate.
In May, Just Retirement released an enhanced fixed term annuity which allows investors to move onto an enhanced rate immediately if they become ill during the term of the contract.
LV= is also working on improvements to its fixed term offerings.
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