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Blight puts bite on pension and endowment business

The latest ABI figures make grim reading for the industry, with a slump in endowment sales and contiued pension planning blight.

The figures for the second quarter of the year reveal sales of mortgage-related endowments plummeted to 72,000 new contracts compared with 165,000 in the same period last year. Regular-premium pension plan sales also dropped by 25 per cent to 197,000 from 262,000.

The total number of individual pension policies sold fell by 12 per cent to 301,000 although the value of prem-iums rose by 8 per cent to just under £2bn.

But there may be some hope on the horizon, with the figures also revealing the amount invested in new individual regular-premium business increased by 12 per cent to £429m from £383m.

The figures also show the value of individual life insurance policies sold in the second quarter fell by 2 per cent to £6.1bn from £6.3bn for the same period last year.

Sales of both regular- and single-premium life policies fell, with regular premiums dropping by 23 per cent to £345m and single premiums by 1 per cent to £5.8bn.

ABI spokesman Malcolm Tarling says: “The planning blight seems to be affecting sales. The uncertainty means that consumers and IFAs are hanging fire.

“The figures for endowments are hardly surprising given the fact they are sub-ject to a wide-ranging indus-try review, a number of sell-ers have pulled out. They are now seen as a repayment method for a more selective audience.”

Scottish Life marketing manager Alasdair Buchanan says: “The marketplace is still concerned about buying a pension. It is ironic this goes against the Government&#39s intention to raise private provision butthe reality is that IFAs and customers are reluctant, given the uncertainty of change.”

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