JustMay 18 2017

JRP sales rise but lifetime mortgages tumble

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JRP sales rise but lifetime mortgages tumble

Pension group JRP announced a sharp decline in equity release advances in the three months to the end of March, offset by a large increase in defined benefit de-risking volumes

The group, which was formed from the merger of Just Retirement and Partnership last April, said that sales of its lifetime mortgage products were down 29 per cent against a “tough comparator”, while sales of care plans were down 41 per cent.

However, guaranteed income for life product sales  rose 11 per cent and defined benefit de-risking volumes rose 191 per cent to £125m.

Overall, the group's sales, on a pro-forma basis, were up 13 per cent to £436m. The company described its current level of mortgage advances as "more normal".

Rodney Cook, chief executive of JRP, said: “The directors remain comfortable that the group's capital position is appropriate to deliver the growth and returns that we are targeting. Overall we have enjoyed a solid start to the year and we remain on track to meet our expectations."

The group's shares were up 1.5 per cent in early trading.

Pension freedom reforms had a significant effect on the sale of annuities, with sales falling by 42 per cent from £11.9bn in 2013 to £6.9bn by the end of June 2014, according to data from the ABI.

When the merger of Just Retirement and Partnership was announced in August 2015 the two companies said it would allow them to “tackle the challenges” posed by the recent reforms.

Both companies were stock market listed (one on the AIM and the other on the main market)  and following the 2014 Budget, which announced nobody would have to buy an annuity anymore, Partnership’s share price plummeted 60 per cent, falling from £3.19 to around £1.22 by the end of that week.

Just Retirement’s shares took a similar nose-dive, falling 48 per cent from £2.67 to £1.40.

rosie.murraywest@ft.com