LV= has said its annuity customers whose income is linked to the Retail Price Index (RPI) will not see a reduction in their retirement income despite the UK falling into deflation for the first time in almost 50 years. For the first time since March 1960, annual inflation measured by the RPI fell to below zero. It fell from 0.0 per cent in February to -0.4 per cent in March. The Consumer Price Index has also fallen, down to 2.9 per cent in March, from 3.2 per cent in February. However, LV= has rushed to assure its annuitants that their returns will not suffer. "Some of our annuity products incorporate index-linking, and where the income is specifically linked to RPI, it would normally be expected to reduce in line with deflation," said Matt Trott, head of annuities. "However, we have no current plans to do this. Whilst we always keep the situation under review we are pleased to confirm that none of our annuitants will experience a decrease in income due to the deflation announcement this morning."
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