Annuity enquiries at pension specialist Partnership Assurance fell 50% following the Budget in one of the first concrete signs of the damage liberalisation could do to the industry.
The announcement that pensioners would no longer be required to buy an annuity at retirement ‘has caused significant disruption to Partnership’s core market,’ the company said in a statement.
It noted that of the ongoing business pipeline at the time time of the Budget in March, 70% of customers had gone on to buy an annuity, however.
‘Partnership has taken immediate action to manage its cost base in the short term, including freezing recruitment, removing contractors where possible and requiring [chief financial officer] approval for all capital spend’, it added.
Shares in the business plummeted almost 60% in mid-March after chancellor George Osborne surprised the industry by saying retirees would be allowed to choose how to spend their pensions.
Chief executive Steve Groves nonetheless struck a bullish tone. ‘The Budget has provided us with more flexibility to innovate, whilst continuing to give our customers the financial security they desire in their retirement,’ he said.
‘It is still early days in the post-Budget world, but I am encouraged by the recognition by customers and advisers that the guaranteed income for life provided by our annuities, which typically pay an annuity rate of 6 - 7%, continues to be attractive.’