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Just Retirement restructures as annuity sales slide on Budget bombshell
by Dylan Lobo on May 12, 2014 at 07:56
Just Retirement is to spend millions on a restructure after a 50% plunge in annuity sales following March's Budget.
Just Retirement said the one off reorganisation, which will cost £5 million, is expected to save the group £14 million next year.
It also said it would invest an additional £5 million into the business over the year.
'Together, these steps will ensure that we are ready with appropriate new product and distribution offerings in April 2015 when the new regime begins,' the firm told the stockmarket.
Chief executive Rodney Cook (pictured) added: 'Although operating conditions have become much tougher since the Budget, with sales at around half of pre-Budget levels, we are rapidly adapting our model to the new environment. I am confident that by continuing to offer customers a fairer deal in retirement we can deliver further shareholder value.'
It is not clear whether the restructure will result on job losses.
Before chancellor stunned the pensions world by saying people would not longer be required to buy an annuity on retirement, business was reasonable at Just Retirement in the run up to the Budget.
In the three months to 31 March, individual underwritten annuity sales were up 34% year-on-year at £288 million.
It also saw record quarterly lifetime mortgage advances at £159 million, a rise of 128%.
Shares in the firm plunged by 36% in the hours after the Budget.
At 8.50am shares had rallied by 4.5% in response to the restructure news to stand at 164.4p, although they remain some way off a 52-week high of 289.25p.
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