View more on these topics

Bulk deals boost L&G as individual annuity sales fall 40%

Insurer took a £15m hit as customers cancelled their annuity purchase following the Budget

Legal & General experienced a 40 per cent fall in individual annuity sales in the first three months of the year, including a £15m hit as customers cancelled their annuity purchases in the wake of the Chancellor’s Budget announcements.

L&G’s interim management statement, which was published last week, shows that individual annuity sales fell from £406m in Q1 2013 to £244m this year. 

The insurer says around £15m in losses relate to cancellations during the extended cooling-off period following the new pension freedoms announced in the Budget.

The insurer was boosted by the £3bn bulk annuity deal it agreed with the ICI Pension Fund in March, said to be the largest bulk annuity purchase arrangement by a pension scheme in the UK. Retirement new business premiums rose from £800m to £3.3bn following the contract with ICI.

L&G says it expects to write growing volumes of bulk purchase annuity deals, which should “more than offset individual annuity reductions”. 

The provider adds that it is developing low-cost income drawdown products to give customers options on the amount of risk they want to take and the amount they want to
be guaranteed.

The Cofunds platform, which L&G acquired in May last year, saw net inflows of £1.5bn, giving total assets under administration of £65.6bn.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm