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.

L&G plays down annuity fears as it unveils record results

L&G plays down annuity fears as it unveils record results

Legal & General has played down the impact of the Budget changes, saying it expects its growth in its bulk transfer annuity business to more than offset the reduction in individual policy sales.

In its first quarter results, the company unveiled record net cash, annuity and protection sales. This included bulk purchase annuity premiums surging to £3.05 billion on the back of its £3 billion deal for the ICI pension fund, up from £357 million in the same period last year. Individual annuity sales fell by 40% from £405 million to £244 million, which included £15 million of cancellations immediately after the Budget. L&G said it expects the market to halve this year and next as its colours to the bulk annuities mast. Overall, total annuity assets rose by 15% to £38.3 billion.

Total net cash generation was up 21% at £301 million with operational cash generation up 6% to £297 million.

The insurer also welcomed the government’s capping of charges on auto-enrolment default funds at 75 basis points, saying it expects to benefit as it already run schemes with a cap of 50bps.

Elsewhere, Legal & General Investment Management (LGIM) saw its assets under management rise to an all-time high of £463 billion on net inflows of £3.8 billion.

Group chief executive Nigel Wilson (pictured) said: ‘We already benefit from favourable demographic trends; we have economically and socially useful products for customers; and with our LGIM economists forecasting 3% plus economic growth in the UK and US, we are excited about the prospects for our business.

‘There is strong demand for our pension de-risking and protection products in both markets - the £1.8 trillion of UK DB liabilities will provide substantial future business. We believe the UK DC market will grow from around £250 billion today to £3 trillion by 2030. LGIM's recent agreement to acquire Global Index Advisors (GIA), a US based DC provider will accelerate our US growth.’ 

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 Navigating geopolitical risk with ETFs

Navigating geopolitical risk with ETFs

ETFGI’s Deborah Fuhr on how investors can use exchange-traded funds to position their portfolio.

Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Wealth Manager on Twitter