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Norwich Union is poised to introduce postcode-rated annuities this September, according to a spokesman.

As of 22 September, the insurance giant which is undergoing a rebrand to global name Aviva, will be taking postcode, marital status and smoking into account when deciding on the size of annities.

Willie Mowatt, director of marketing for Norwich Union, said postcodes would be classified into nine different categories, with the underlying distinguishing factor between the categories being life expectancy.

He said: "We have seen a lot of markets evolving and using these factors and we feel that the time is right to bring this into the life insurance company. We are starting with annuities but it will evolve into other products.

However, Bristol-based Hargreaves Lansdown said the decision to introduce postcode-rated annuities was "further evidence of the rapid evolution taking place in the annuity market."

Kevin Morgan, managing director for Hertfordshire-based IFA Consilium Financial Planning Limited, said: "It is discriminatory in that it tends to lump groups of people together by dint of where they live, making no concession for individual lifestyle."

Mr Morgan also said open market options needed to be better utilised.

He said: "The industry should take a lead in promoting more proactively the need to take advantage of an open market option."

Going forward he advocated a uniform and straightforward system for accessing the option, saying: "I would like to see an industry standard form that all companies would adopt to ease the transfer of money from pension provider to annuity provider."