You are here: Home - Retirement -

Prudential latest insurer to report sharp fall in annuity sales

Written by:
Prudential has become the latest life company to report severely hit annuity sales in the wake of radical reforms to how people can access their pension.

Individual annuity sales were 35 per cent lower in the first quarter of the year, the life company said, costing it £36m.

Prudential said this reflected the “overall downturn in the market though 2013 as policyholders have increasingly chosen to defer retirement”.

However the hit is also likely to have been caused by changes in the March Budget which mean that from 2015 all individuals aged 55 and over can access their entire pension fund as cash, removing the effective requirement to buy an annuity.

On Wednesday Legal and General (L&G) reported that it saw its individual annuity sales drop 40 per cent in the first quarter of the year, with sales down from £406m in 2013 to £244m.

This included a circa £15m impact from cancellations during the extended cooling off period offered after the Budget changes were announced.

Last week Standard Life said its annuity business had tumbled 50 per cent in the first quarter of the year, without giving any more figures.

However it added that the negative profit impact of the changes will reflect the relatively small size of its annuity business.

Elsewhere in its first quarter results, Prudential said sales from other retail products, principally individual pensions, protection and health products and offshore bonds had increased by 22 per cent to £39m.

M&G, Prudential’s asset management arm, delivered over £1.4bn of net inflows in the first quarter of 2014.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Royal Mail fined £1.6m for delivery failures and overcharging customers

Royal Mail has been fined £1.5m for failing to meet first-class delivery targets and a further £100,000 for ov...
Royal Mail fined £1.6m for delivery failures and overcharging customers

Lloyds and Nationwide rapped over PPI breaches

The competition regulator has shamed Lloyds and Nationwide for breaching PPI orders yet again.
Lloyds and Nationwide rapped over PPI breaches

Stamp duty cut confirmed by chancellor

A stamp duty holiday will start immediately, the chancellor today confirmed in his summer statement.
Stamp duty cut confirmed by chancellor

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
British Gas pledges no price hikes in 2014

British Gas will not raise prices this year, its parent company Centrica announced today, despite slashing its earnings outlook.