Canada Life has acquired Retirement Advantage as it plans to push into the equity release market.
Annuity provider Retirement Advantage rebranded from MGM Advantage in 2014 after it merged its retirement income and equity release divisions. The firm, which has 30,000 pension and equity customers with £2 billion of assets, also launched a blended drawdown product with an income guarantee in 2015.
Canada Life currently offers annuities, group protection and a range of investment and saving products.
Canada Life chief executive Doug Brown said the deal 'broadens our product suite to include equity release mortgages', an area it did not previously have a foothold in.
Equity release, which allows people to borrow money against the value of their homes, has become increasingly popular since the introduction of pension freedoms in 2015. According to the Equity Release Council, in 2016 £2 billion of housing wealth was accesses in a single year for the first time.
Canada Life did not disclose how much it paid to buy Retirement Advantage.
Craig Fazzini-Jones, Retirement Advantage’s chief executive, said the deal will allow the firm to develop its products.
‘This acquisition is a positive endorsement of the business plan we adopted following the UK pension reforms announced in 2014 that transformed our business and drove the creation of innovative retirement solutions. As we join Canada Life, we will be well positioned to build upon that success and provide greater retirement protection for our customers,’ he said.
The deal is expected to complete in the fourth quarter of 2017 subject to regulatory approval.