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Partnership in recruitment freeze as individual annuity sales fall 44%

Partnership has put a freeze on recruitment and is requiring its chief financial officer to sign off on all capital spend as it looks to manage its costs following the Budget.

In its Q1 interim management statement, published today, the provider revealed individual annuity sales have fallen 44 per cent year-on-year from £357m to £200m.

Defined benefit bulk annuity sales have jumped over the same period from £2m to £34m.

Care sales are up a third from £15m to £20m, while protection sales remained flat at £1m.

Partnership admits the Budget has caused “significant disruption” within the provider’s core market, but says 70 per cent of pipeline annuity cases went ahead in the wake of the Budget.

Average daily individual annuity quote levels, which the provider says is a good indicator of future sales, are down 50 per cent in the eight weeks since the Budget compared to the month before the Budget.

Partnership says it is managing its cost base in the short-term by freezing recruitment, removing contractors where possible and requiring CFO approval for all capital spend.

The company says it is unclear how at-retirement guidance as outlined in the Budget will offset a lower proportion of customers choosing to take out an annuity.

Partnership says it is focused on product development following the Budget, such as the enhanced choice annuity it launched earlier this week. The product allows clients to exit after a year if they want to move into drawdown or take their pension pot as cash. Savers can also stick with the annuity after 12 months if they want to.

Partnership chief exectuive Steve Groves says: “Since the Budget, we have seen quote volumes at approximately 50 per cent of the pre-Budget level, indicating that annuities continue to represent an attractive retirement income option for many customers.

 “It is still early days in the post-Budget world, but I am encouraged by the recognition by customers and advisers that the guaranteed income provided by our annuities continues to be attractive. 

“The board is confident that Partnership is able to face the challenges ahead and capitalise on the opportunities presented by this changing market.”

 

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