Struggling Saga bets on pensions reform

EMBATTLED over-50s giant Saga is branching out into investment advice in a bid to exploit the Chancellor’s radical shake-up of the pensions market.

The move, part of the group’s long-awaited turnaround plan, was unveiled yesterday by new chief executive Lance Batchelor.

Saga is teaming up with Londonbased financial planning firm Tilney Bestinvest and will offer pensions and investments to the 10.6m over-50s on its database.

The group’s annuities business has been hit by Coalition pensions reforms which mean that from April savers will no longer be forced to buy an annuity. Saga Investment Services will launch in the second half of the year.

Batchelor, who took the helm last March shortly before Saga’s disappointing float on the stock market, said: ‘There is a very large amount of customers’ funds up for grabs – they will be looking for advice from a trusted brand.’

As part of the overhaul, the firm said it will sell the part of its Allied Healthcare business which provides 15,000 home carers to the elderly via contracts with the NHS and councils.

It will now focus on private healthcare customers.

The group said it plans to double the size of its travel operation, which includes its cruise holidays, in the next five years.

It is also expanding its motor insurance business, and plans to offer cover from other insurers.

The group said it is trading in line with expectations and its full-year dividend will be at the top end of the target of 40-50pc of earnings.

Shares were trading at 162.5p (up 1.6p) yesterday, well below the 185p launch price.

Saga is still grappling with a £700m debt pile after its former private equity owners merged it with the AA in 2007. The two companies are now separate.