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Hard hit investors approve Just Retirement merger

Hard hit investors approve Just Retirement merger

Investors in annuity providers Just Retirement and Partnership have voted in favour of a merger, two years after watching their shares plummet in value as George Osborne scrapped the need for people to buy the companies’ products.

The merger - which will create a company known as JRP Group - will now take effect from 4 April and will see 240 jobs put at risk as the combined entity looks to cut staff by 20 per cent.

Just Retirement’s shareholders, who met in Reigate this morning, approved the scheme unanimously, while 99.95 per cent of Partnership shareholders, who met this afternoon, voted in favour.

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Announced last August, the merger sees the companies join forces to overcome the huge hit they suffered as a result of chancellor George Osborne’s decison to give everyone aged 55 and over completely free access to their pensions, removing the need for them to buy an annuity.

In the week of Mr Osborne’s Budget in March 2014, when he announced “no one will have to buy an annuity”, Partnership’s share price plummetted 60 per cent, falling from 319p to around 122p by the end of that week.

Just Retirement’s shares took a similar nose-dive, falling 48 per cent from 267p to 140p.

Neither company has recoved. Today (30 March) Partnership’s share price stands at around 125p, with Just Retirement at around 153p.

Steve Lowe, group communications director at Just Retirement, said: “We are pleased shareholders have provided overwhelming support for the merger and look forward to completing the transaction on 4 April, subject to sanction by the court.”

A spokesperson from Partnership, said: “We are pleased to have received overwhelming support from shareholders and look forward to completing the merger in due course.”

JRP will be lead by Just Retirement’s Rodney Cook as chief executive, while Steve Groves, the current chief executive of Partnership, will step down once the merger is complete.

Partnership’s results, published on the day the merger was announced, revealed in the first six months of 2015 new business sales of individually written annuities were £128m, compared to £334m in the first half of the previous year.

Just Retirement’s results from last May showed total annuities were down 15 per cent, compared with the nine months ending 31 March 2014, to £874.6m.

However latest figures from the Association of British Insurers have pointed to the start of a revival in annuities following their post-pension freedom fall.

Jim Boyd, director of corporate affairs at Partnership, said: “The value of a guaranteed income in retirement has arguably never been more important. The ABI figures demonstrate that consumers recognise this in their retirement planning.”

At the end of September the annuity specialists raised £150m through two share placings to help meet the costs of the merger.