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MGM Advantage to cut staff by a third after Budget annuities shock

MGM Advantage is preparing to make large-scale redundancies in response to radical annuity reforms announced in the Budget.

The provider, which employs 250 people, will cut 80 roles linked to its annuity business in anticipation of a drop in sales.

MGM says the cuts will be managed “where possible” through natural turnover and voluntary redundancy but there could also be compulsory redundancies. It has confirmed that chief financial officer Simon Whitehead will leave “to focus on interests outside the business”.  He will be replaced by corporate development director Simon Smith.

MGM chief executive Chris Evans says: “It is clear the changes proposed in the recent Budget create many challenges for the industry.

“In the need to respond quickly and effectively, we will focus on what we do best, developing innovative retirement income solutions. Advisers and our customers will continue to receive support through this transformation of the at-retirement market. In the interim, we need to align our cost base to our new business plan.” 

MGM says it is working on a “radical” new proposition for the retirement income market that will be available early next year.

Just Retirement, which issued an annuity sales warning last month, would not comment on the potential for future job cuts. Partnership said it was too early to assess the impact of the Budget changes on consumer and adviser behaviour.

Annuity Line head of business development Billy Burrows says: “The Budget changes present a huge challenge to the industry and I would be very surprised if MGM is the only provider to make cuts.”

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