Aegon UK mulling sale of annuities business

Aegon UK is considering the sale of its annuities business

Aegon UK is considering the sale of its annuities business

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Life and pensions provider Aegon UK has pledged its “long-term commitment” to the UK market after admitting it is considering the sale of its annuities operation.

The move follows reports that the Edinburgh-based firm’s Dutch parent group had hired investment bankers to sound out buyers for a range of assets.

Aegon declined to comment, but in a note to the company’s 2,300 employees, seen by The Scotsman, UK chief executive Adrian Grace said: “I would like to confirm that Aegon has a long-term commitment to the UK market.

“We have built a market-leading platform which continues to be the fastest-growing platform both by percentage and in terms of asset growth… We will continue to grow our platform both organically and through acquisition.”

However, Grace added: “As part of our on-going review of our portfolio of businesses, and our focus on drawdown and guaranteed products, we have initiated a review of our annuity portfolio in the UK.”

Last month, Aegon UK reported pre-tax profits of £53 million for the six months to June, an increase of 10 per cent on a year ago, with assets under administration on its online savings platform more than doubling to £4.6 billion.

The pensions industry is having to come to terms with rules that mean retirees are no longer forced to buy annuities with their ­pension savings.

At the time of the firm’s results, Grace said that a new product, dubbed Secure Retirement Income, had filled a “huge gap in the market” for people who did not want to buy an annuity but were still looking for a guaranteed income when they retire.

“The problem with income drawdown is you don’t get that certainty of income in retirement – customers don’t want to gamble on the stock ­market but still want the benefits of ­increasing the size of their pot,” he said.

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