LV= has reported an 11 per cent surge in life and pensions sales during the first quarter of 2014 but warns annuity sales are likely to drop in the coming months following Chancellor George Osborne’s radical overhaul of UK pension rules.
A trading statement from the mutual insurer, published this morning, reveals total new life and pensions business increased from £35m in the first three months of 2013 to £39m in Q1 this year.
Year-on-year pensions sales fell by £1m in Q1, from £15m to £14m, while annuities sales increased from £9m to £11m.
Equity release new business was also up £1m, from £2m to £3m, with protection sales unchanged at £7m.
The provider’s savings and investments arm, which includes its with profits business, saw sales increase from £2m in Q1 last year to £4m in Q1 2014.
LV= chief executive Mike Rogers says annuity sales and profits are likely to be hit by the Budget reforms.
He says: “We expect to see lower levels of annuity sales over the coming months as consumers defer decisions until the new regime takes effect.
“We also believe that margins will be negatively impacted on the range of retirement solutions products in the future.
“We are well placed over the medium term to benefit from the new landscape as consumers increasingly shop around to find the right product for their personal circumstances.”