Aegon UK is reviewing its annuity portfolio worth £9 billion with Legal & General rumoured to be interested as a possible buyer.

There is competition as Rothesay Life, which bought the UK annuity portfolio from Zurich worth £1.2 billion last year, is also believed to be interested.

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Aegon UK confirmed it is reviewing its UK annuity portfolio. It said new life sales were down 30 per cent to £139m from July 1 to September 30 last year, which was largely due to a fall in demand for traditional pension products. Last year the UK government allowed greater freedom for pensions so people were able to look at alternative ways of investing or even to free up the cash to spend as they wish.

Whilst it is reviewing its business in the UK, Aegon has said it’s committed to providing services there and has its base in Edinburgh. A Citywire report says Aegon also reported a 16 per cent fall in life sales to £190 million in its half-year results.

Although annuities are still big business, the attraction is waning for some investors.

What to Do with a Pension Pot

Pensioners and people approaching pensionable age are facing more choices instead of annuities.

Many pension plans now offer the choice of a tax-free lump sum of up to 25 per cent of the pension pot, which can be spent or invested how they wish. It can also be invested in other areas which may give a higher income than an annuity. It could also be invested with the option of withdrawing lump sums as and when required.

Whilst it’s good news that people have more control over their money and how they wish to invest or spend their pension pot, as always it’s important that they receive the correct advice.

Getting sound financial advice

This is where sound financial advice comes into play. People must be given all the options to find the right solution for their individual requirements.

Financial advisors frequently keep track of their clients and those who are coming up to the age when they can release their pension pot or draw their pension by using specialist IFA back office software such as that offered by www.intelliflo.com.

Web-based business management systems help financial services operate and streamline the process through which customers can access pertinent information.