Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a751065

Partnership annuity business falls 50% after Budget

by David Campbell on May 14, 2014 at 07:40

Partnership annuity business falls 50% after Budget

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.’

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:

Look up the shares

  • Partnership Assurance Group PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet