"Individual annuities still have their place, but customers want more choice in how they fund their retirement, with accessing housing wealth being an attractive option for asset rich, income poor retirees."
New bulk annuity transactions totalled £250m in June, bringing business executed in H1 2016 to £3.6bn, over £1bn ahead of the full year bulk annuity sales figure for 2015.
Lifetime mortgage sales exceeded £200m and are now greater than its individual annuity sales in H1 2016. L&G says it "expects this trend to accelerate as more baby boomers retire and choose to access their housing wealth to help fund their retirement, instead of buying an individual annuity".
Kerrigan Procter, Managing Director of Legal & General Retirement, said: “Political and market uncertainty around the EU Referendum did not get in the way of business, as companies or individuals will always need to manage their employees’ or own retirement. Bulk annuity transactions continue to be an important way for Legal & General to deploy capital to help our UK clients, and use the premiums to invest in real assets such as UK infrastructure and direct lending.”
Bernie Hickman, CEO of Legal & General Home Finance, added: “Legal & General entered the lifetime mortgage market last year. Our lowest interest rate on lifetime mortgages is now below 5%, and we have recently been awarded Lifetime Mortgage Lender of the year. We have seen rapid growth, and within a year of entering the lifetime mortgage market, now provide more lifetime mortgages to our customers than individual annuities. Individual annuities still have their place, but customers want more choice in how they fund their retirement, with accessing housing wealth being an attractive option for asset rich, income poor retirees.”
