Pension firm sales cut 50% since Budget

JUST Retirement has become the latest company to be hammered by the Chancellor’s Budget shake-up of pensions, revealing sales of annuities have been cut in half.

The specialist firm said sales of annuities jumped 34pc to £287.5m in the three months to the end of March. But sales dropped almost 50pc from the Budget on March 19 to the end of April.

Chief executive Rodney Cook said he expected this trend to continue for the rest of the year.

Just Retirement is expected to axe jobs, incurring a one-off cost of £5m as the firm tries to make £14m in savings in next financial year.

However, Cook hit back at predictions reforms will destroy the annuity market, with savers wanting to spend their pension pot before they die.

He said: ‘It’s a silly notion to say if you think you’re going to l i ve another 15 years on average you’ll make sure you spend all money by the 15th year – what are you going to do if you’re not dead yet?’

Just Retirement – along with fellow specialist annuity firm Partnership – saw shares plunge on the day of the Budget.

Under the reforms, savers aged 55 and over can draw as much of their pension as they choose, subject to their marginal tax rate. Experts have predicted individual annuity sales will fall 75pc when the changes come into force next April.

Just Retirement and Partnership, which provide a more generous income to those with medical conditions, fear they will be the worst affected.

Cook said Just Retirement, which also offers equity release products to those who want to unlock value in their homes, is boosting the investment budget by half, to £5m, in a bid to come up with more flexible pensions.

Standard Life and Legal & General have admitted annuity sales have slumped since the Budget, while specialist annuity firm MGM Advantage is cutting almost a third of its 250-strong workforce.