Resolution made a defiant stance this morning, telling the stock market that it believes the Budget proposals to scrap compulsory annuities will actually strengthen its business.
Insurers sold off sharply yesterday following the chancellor’s statement with Resolution’s share price diving by 15%, wiping £800 million off the firm’s value.
However, it said that while there is a ‘negative implication’ for new business flow in the individual annuity market, it believes annuities will continue to be ‘an important product for those who value the guaranteed income throughout increasingly long retirement periods.’
‘Overall we see the proposals as a positive for the retirement savings market. The increased flexibility for savers means the attractiveness of placing additional contributions into a pension has now increased,’ the group said,
‘As the number two player in workplace defined contribution (DC) pensions with around 2 million DC pension customers overall (estimated to hold 1 in seven policies in the market), and with positive operational leverage in our corporate benefits business, Friends Life is well placed to benefit from these changes.’
Resolution, led by chief executive Andy Briggs (pictured), added that it is already working on expanding its range of retirement propositions.