Just Retirement has announced a group restructure after a fall-off in activity in the wake of the Budget which is targeting £14m in annual cost savings.
In an interim management statement, published today, Just Retirement says individual annuity sales for the three months to the end of March were up 34 per cent to £287.5m. But the provider admits the pension freedoms announced in the Budget had a “materially negative” impact.
Just Retirement says from Budget day to the end of April, activity levels “fluctuated, but have fallen by just under 50 per cent on average compared to pre-Budget run rates.”
As a result, the company has announced a group reorganisation which will generate annual cost savings of £14m in the next year financial year. The restructure will also look to cut £5m in one-off costs this financial year, but will make an additional £5m investment in the business to cope with changing market demand.
Just Retirement chief executive Rodney Cook says: “Although operating conditions have become much tougher since the Budget, with sales at around half of pre-Budget levels, we are rapidly adapting our model to the new environment. I am confident that by continuing to offer customers a fairer deal in retirement we can deliver further shareholder value.
“We expect distribution shifts to give us access to a growing proportion of retirees, particularly if the Government’s guidance concept is successfully implemented. We are also working hard to align capacity with demand and are today announcing a reorganisation to deliver some £14m of annual cost savings.
“Financial intermediaries are still rightly advising many of their clients that a guaranteed income for life is often the best retirement solution. Our underwriting skills mean we offer them competitive terms, whilst protecting against the risk of outliving their money.”