Just Retirement has warned shareholders it is unlikely to meet the 7 per cent growth in annuity sales flagged in its interim management statement following radical reforms announced during the Budget.
The pension liberalisations, which come into effect from April next year, will allow anyone aged 55 or over to take 100 per cent of their pension pot as cash.
Just Retirement, which relies heavily on individually underwritten annuity sales, saw its share price plummet over 40 per cent on the day of the Budget as investors predicted huge falls in annuity business.
Announcing the completion of a £36.5m bulk annuity deal today, Just Retirement chief executive Rodney Cook warns investors the 7 per cent growth in year-on-year individual annuity sales outlined in the firm’s interim results is now “inappropriate”.
He says: “Although it is very early days, our current trading suggests that the Budget has had a material effect on individually underwritten annuity volumes.
“As financial advisers and customers come to terms with the new environment we are optimistic that large numbers of them will continue to secure a guaranteed lifetime income in retirement, particularly if the new guidance concept is effectively implemented.
“However, given the high degree of uncertainty in the near term outlook, the 7 per cent growth in full year sales that we flagged at interims is no longer appropriate.”
The provider will issue a further market update on 12 May when it releases its Q3 interim management statement.