Just Group has seen a 10 per cent drop in retirement income sales in the first half of the year, as guaranteed income and care product sales were hit by the effects of Covid-19.
According to Just’s half year results for the period ending June 30, 2020, published today (August 13), its retirement income division saw sales drop to £744.9m.
Forming a small part of this business, care sales were down 16 per cent to £26m with the group saying this product line had been most affected by Covid-19 due to measures put in place to protect vulnerable customers.
In addition, guaranteed income for life sales decreased by 10 per cent to £258.6m as advisers battled with lockdown measures and being unable to provide face to face advice.
But in June sales of these products returned to their normal levels signalling that losses were only temporary, the group said.
It stated: “Volatile investment markets and economic uncertainty have demonstrated to customers the importance and security of a guaranteed income.”
Drawdown sales now stand at nil as Just’s flexible pension plan was closed to new business from July 2019, with existing customers being migrated to a third party platform.
Across the group pre-tax profits stood at £305m, compared with £125m in the same period in 2019, which was driven by investment profit a “stable underlying operating profit” of £117m, compared with £114m in 2019.
However, adjusted operating profit was 18 per cent down at £62m (£75m in 2019) due to higher charges.
The group anticipates that sales in the second half of the year with be “significantly higher” than those currently.
David Richardson, group chief executive officer, said the business was focused on improving its capital position, with the group aiming to achieve capital self-sufficiency by 2022.
He said: “Over the past 15 months we’ve been transforming the way we do business in order to deliver a more sustainable and resilient model. In this context I am very pleased with our progress in the first half of 2020.”
He added: “We are optimistic about the future. We hold leadership positions in valuable segments of economically attractive markets and will continue to innovate to selectively grow our participation in these markets.
“The transformation continues, our business is resilient, our thirst for innovation is unabated and we have lots of energy because there is much more we want to achieve.”
Earlier this year, Just launched a fully advised online financial planning service, called Destination Retirement, targeted at savers who are approaching retirement with only a modest pension pot, in a move to close the advice gap.
Just stated: “The service provides the opportunity to receive tailor-made regulated financial advice without paying the costs associated with a traditional financial adviser.”
The firm is also piloting a service that will give investors who manage their portfolios on investment platforms the chance to receive a guaranteed income.
Yesterday (August 12), Just appointed John Hastings-Bass as its new chairman to take over from Chris Gibson-Smith, who announced his retirement plans in March after four years in the role.