Pensions  

Just Retirement individual annuity sales down 59%

Just Retirement’s latest results today (10 November) have shown a fall in individual annuity sales of 59 per cent during the third quarter to £129.3m, compared to the same period last year.

The group’s interim management statement for the quarter ending 30 September, blamed the continued market disruption caused by the pension reforms announced within the Budget.

“A combination of more generous trivial commutation limits and lower secured income requirements for wealthier drawdown customers has affected both ends of the market,” it read, adding that “many in the middle ground have deferred their decision until the new regime is fully understood in April 2015.”

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Fixed term annuity volumes of £20.2m fell only 1 per cent compared to the third quarter last year, helped by the one-year fixed term deal launched shortly after the Budget.

Total sales for the quarter were 42 per cent lower than the same period in 2013, even as defined benefit de-risking sales at £25m were up significantly from £3.2m during Q3 last year.

Lifetime mortgages of £81m were advanced in the quarter, a decrease of 23 per cent on the prior year’s comparative period, reflecting falling annuity volumes and therefore reduced funding.

Rodney Cook, chief executive of Just Retirement, said that the figures compare favourably with realistic expectations in the post-Budget world.

“Our DB team continues to win new schemes, which will help us should demand for IUAs weaken further in the run up to the pension reforms in April 2015.

“Our success in the DB market also demonstrates that Just Retirement retains the entrepreneurial spirit of a company currently celebrating only its 10th anniversary. This gives me confidence that our new generation of post-Budget retirement income products will contribute to revenue momentum in 2015.”

He added: “Our unique medical underwriting skills will be more relevant than ever to those financial advisers with a duty to ensure that their customers do not outlive their savings.”

peter.walker@ft.com