Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Budget 2014: Hargreaves Lansdown soars 15%, but life companies hammered

Budget 2014: Hargreaves Lansdown soars 15%, but life companies hammered

Hargreaves Lansdown’s share price bounced by nearly 15% on the news that George Osborne is to introduce a new ‘super ISA’, but life companies took a beating as compulsory annuities were abolished.

There were distinct winners and losers in a Budget that Osborne said was designed to help beleaguered savers.

Hargreaves, co-founded by Peter Hargreaves (pictured), was one of the biggest beneficiaries. Its share price had been trending downward in morning trading, but spiked by 14.46% from 1302p to 1504p straight after the news after the chancellor unveiled plans to merge stocks and shares and cash ISAs with a raised annual allowance of £15,000.

However, his removal of an obligation to buy annuities as part of a dramatic overhaul of the pensions regime hit life companies hard.

Legal & General’s share price fell by 12.28% on the news before paring back some of those losses to close down 8.4%. Aviva was down 5.14%, Standard Life by 3.9% and Prudential by 2.11%.

Specialist annuities providers were the hardest hit. Partnership Assurance's share price slumped by a whopping 55%, while Just Retirement's shares dived by 42.4%. 

‘A quarter of annuity sales are under threat as a result of changes to single pot triviality rules,‘ said Adrian Walker, retirement planning manager at Skandia.

'Today’s Budget announcement confirmed that consumers with pension pots of up to £10,000 are able to access their savings without having to buy an annuity. Our analysis of ABI data suggests that around 25% of annuity sales are currently for pension pots of less than £10,000.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JP Morgan AM's Conte: why France is my biggest overweight

JP Morgan AM's Conte: why France is my biggest overweight

The European Smaller Companies trust fund manager is also finding opportunities within the European IPO market.

Brewin's Foster: running out of value with Sandy Nairn

Brewin's Foster: running out of value with Sandy Nairn

In this week's podcast, Guy Foster and Dr Sandy Nairn discuss caution towards the stretched valuations most stock markets today currently offer.

Play Colin McLean eyes disruptive potential

Colin McLean eyes disruptive potential

SVM's Citywire AA-rated manager says he is finding more opportunities within mid cap space.

Your Business: Cover Star Club

Profile: CHI's bond supremo on liquidity and bond risk management

Profile: CHI's bond supremo on liquidity and bond risk management

'Some people have been extremely complacent about rate rise risk. Myself, I wish they would just get on with it.'

Wealth Manager on Twitter