Legal and General have announced £4 billion worth of new business in retirement lending for the first half of the year as Lifetime Mortgages overtake individual annuities.
The firm say the EU referendum hasn’t caused any blips in trade as far as they are concerned, with £250 million worth of new bulk annuity transactions executed in June alone.
Following the £2.9 billion Aegon back-book transaction in May, this brings bulk annuity business executed in H1 2016 to £3.6 billion, over £1 billion ahead of the full year bulk annuity sales figure of £2.4 billion for 2015.
Lifetime mortgage sales exceeded £200 million in the first half of 2016 meaning these too have surpassed the full year for 2015, as well as being greater than their individual annuity sales in H1 2016.
Legal & General Retirement sales across bulk annuities, individual annuities and lifetime mortgages totalled £4 billion in he first half of 2016.
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.”
Legal & General Retirement now provides more lifetime mortgages to its customers than individual annuities. The company expect 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.
Bernie Hickman, CEO of Legal & General Home Finance, said: “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.”