Aegon UK mulling sale of annuities business

Aegon UK is considering the sale of its annuities business

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.