Insurer boosted by workplace annuities
Legal & General has seen a record rise in workplace annuities as it offsets the fall in individual annuity sales driven by the Budget pensions shake-up.
The insurance group saw pre-tax profits jump 6% to £636m in the six months to June 30, as bulk workplace annuity premiums more than quadrupled to £3.1bn.
The business also revealed that it took a £12m hit from the extreme weather and flooding that swept the country at the start of the year.
Chief executive Nigel Wilson said the group performed strongly across its markets and has invested £5bn in major UK infrastructure projects to boost Britain's recovery. Legal & General said during the period it wrote the largest ever bulk annuity in the UK with the ICI pension fund, covering £3bn of liabilities.
By contrast the group said individual annuity sales were down 49% to £383m, with the firm expecting 50% falls in both the second half of the year and in 2015. This comes after the Chancellor's surprise announcement that retirees do not have to buy an annuity to draw their pensions.