Legal & General is one of the biggest players in annuities in Britain which offer pensioners a fixed income for life. Prudential pulled out of the annuity market in early 2017.
Prudential pension policyholders who had been promised a guaranteed annuity rate will from Nov. 1 be “introduced” to Legal & General, who will take over the obligation of providing their annuities, L&G said.
The market for individual annuities has been in decline since the British government gave pensioners more choice about how to use their pension pots in 2015.
But L&G said its individual annuity sales had risen by 47% in the first half of 2019, to 497 million pounds.
Britain’s markets watchdog has previously flagged concern about mis-selling of annuities, particularly to people with a reduced life expectancy.
L&G will “compare to whole market to see if the rate can be improved on, assisting customers to obtain a better rate if one is available”, it said.
L&G is also a big player in bulk annuities, which involve taking on the risk of company defined benefit, or final salary pension schemes.
It agreed a 930 million pound bulk annuity deal with Tate & Lyle TATE.L this week.
Reporting by Carolyn Cohn; editng by Emelia Sithole-Matarise
Our Standards: The Thomson Reuters Trust Principles.