Wealth Manager - Essential news for investment professionals

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 Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Play Colin McLean's mid-cap picks

Colin McLean's mid-cap picks

The SVM director and fund manager on his pick of the UK mid-caps.

Play Gervais Williams: the real reason to worry about Quindell

Gervais Williams: the real reason to worry about Quindell

Citywire AA-rated manager Gervais Williams has argued that sentiment is the true danger to Quindell.

Your Business: Cover Star Club

Profile: Psigma's Edinburgh boss on why he is in Scotland long term

Profile: Psigma's Edinburgh boss on why he is in Scotland long term

When Tim Wishart agreed to launch an Edinburgh office for Psigma he was not expecting to  head the company’s first overseas team

Wealth Manager on Twitter