Pensions sales at LV were up by 40 per cent over the first nine months of this year, from £440m to £615m, driven by a rise in demand for income drawdown.
Annuities still took a hit though, down almost a third from £325m during the first nine months of 2014 to £222m from January to September this year.
Within that figure, enhanced annuities fell from £175m during the third quarter last year, to £78m this September, while traditional fixed term annuities were actually up to £144m from £112m in 2014.
Equity release sales were also down 46 per cent, from £84 to £45m, with the fall driven in part by the fact that the firm’s equity release business is internally funded from annuity revenues. The statement added that LV has agreed alternative sources of funding and remains committed to this market.
The provider’s latest trading statement also revealed that sales of flexible guarantee bonds increased by 153 per cent, from £98m to £248m, as retirees look for alternative financial solutions.
Protection sales also increased, rising 35 per cent from £155m to £209m, on the back of strong growth in income protection.
Richard Rowney, LV Life and Pensions’ managing director, commented that the life business continues to perform strongly, with sales up 22 per cent overall, while a 19 per cent increase in retirement sales year on year has been driven by pension sales and the popularity of flexible guarantee bonds.
“We have witnessed a change in the buying behaviour of those approaching retirement and there has been a notable rise in the number of advisers and clients that are now looking for blended solutions - combining the flexibility of drawdown and the guarantees provided by specialist annuities.”
Mr Rowney also noted the firm’s entry this quarter in the corporate market, launching LV Pension Compass, alongside further promotion of the online retirement advice service LV Retirement Wizard.
“These propositions have been extremely well received and we have been approached by providers, pension schemes and advisers who are keen to incorporate the Wizard technology into their systems.
“We are also working with the government and regulators to demonstrate how low cost automated advice can help close the growing advice gap,” he added.
peter.walker@ft.com
