Pension Firms 'Lose Billions' After Speech

Pension Firms 'Lose Billions' After Speech
Pension reform is announced in the Budget and within hours more than £4.5bn is wiped from the big providers as investors bail out.

Britain's financial service providers have lost billions in value after the Chancellor delivered his Budget for 'savers and pensioners', Sky News has calculated.

By mid-afternoon an estimated £4.5bn had been wiped off the value of the top five UK pension companies listed on the blue chip FTSE 100 index.

The investor exodus occurred after George Osborne announced that defined contribution pension holders are to be offered free, impartial and face-to-face advice.

Mr Osborne added in his speech that pensioners must no longer buy annuities if they do not want to.

Annuities provide a fixed income but cannot be transferred between providers.

Legal & General saw £1.8bn wiped from its market value after shares were 14% down in mid-afternoon trades.

Resolution, which traded at almost 10% down for a while, then dipped to 15% down - equal to losing £800m.

Aviva lost an estimated £900m, Standard Life around £350m and Prudential saw £800m wiped due to negative trades.

Meanwhile, independent financial adviser Hargreaves Lansdown saw its share price up 7.5%.

The annuities market has come under scrutiny in recent month, amid calls for widespread reform.

Aviva's chief executive recently told Sky's Jeff Randall Live that the industry did need a shake-up.

The Chancellor also said remaining tax restrictions on pensioners accessing their funds would be removed.

He added that £20m would be spent within two years working with consumer groups and industry on the pension advice structure.

George Bull, senior tax partner at Baker Tilly, said: "For people with defined contribution pension plans, the Budget ushers in the biggest changes seen in the last 25 years.

"From 2015/16 pensioners are to be given greater control of their pension pots.

"Rather than being discouraged from withdrawing money early with a punitive tax charge of 55%, they will be encouraged to do so while paying their personal tax rate.

"'Trust the people' says the Chancellor, and it's clear he does as the increase in the tax yield from people taking their savings early is projected to be £3bn over the next four years."

http://news.sky.com/story/1228619/pension-firms-lose-billions-after-speech

It needed reforming, but this isn't reforming, it's finding a way to get hold of the money for the treasury.

Exactly, and it was all so predictable. People are being hoodwinked by this disgusting government on the back of lies and promises.

Roll up roll up roll up. Get your money now and have a great time - you earned it, you deserve it and we are on your side

What a bunch of chancers and liars this lot are. Get them out.

I'm sure they'll be back on track in a couple of weeks.

This is good for pensioners, which hopefully all of us will be one day.

This is no bad thing, it is stopping the monopoly held by the insurance companies over the pension choices of others.


Where everyone was forced to buy an annuity before, now people are free to invest THEIR money in any way THEY choose.


They can still opt to buy an annuity if they wish, but are not forced into it.


There are many other things people can chose to invest in which may give them greater return each year as well as still having lump sun in asset.