Phoenix Group is “fully equipped” to capitalise on the UK annuity and retirement markets, the firm’s chief financial officer has insisted.
During a webinar discussing Phoenix’s 2024 financial results, Nicolaos Nicandrou said he was “pleasantly surprised” by the opportunities in both the UK annuity and retirement markets.
He said: “The potential is huge, and the capabilities we’ve built to access these opportunities are exceptional.”
He added that, when he joined Phoenix Group in December last year, it was a “revelation” to see both the growth potential and an organisation “fully equipped” to seize it.
Phoenix Group reported, in its results published this morning (17 March), that Standard Life, a brand it has owned since February 2021, has gained 12% share of the individual annuities market since it re-entered in 2023.
It said it had reached £1bn individual annuity premiums written in 2024, compared with £600m in 2023.
The main factor driving this increase is the fundamental customer need these products meet.
Around 80% of people say they want income certainty in retirement and an annuity is the ideal product for this, Phoenix Group said.
“Annuity rates are very attractive at the moment and have risen 8% in the past year,” a spokesperson told Money Marketing.
Plus, the Autumn Budget has changed some wealthier people’s planning assumptions about their pension.
“Pensions will become liable for IHT in 2027 so there’s a greater onus on spending the money or gifting it now and annuities are one way of doing this,” said the spokesperson.
On this morning’s webinar, Phoenix Group chief executive Andy Briggs said he was “particularly pleased” with the individual annuity market, which is “definitely experiencing a resurgence” due to higher rates.
“Nearly a decade on from pension freedoms, many consumers reaching their 70s are recognising the appeal of locking in an income of around 10% per annum for retirement,” he said.
“As concerns about cognitive decline grow, we expect the individual annuity market to strengthen further. Overall, I feel optimistic about the trading outlook.”
He claimed that, in the annuities market, higher interest rates have driven a resurgence in individual annuities, alongside a strong bulk purchase annuity (BPA) market.
“We’ve been a top-five participant in the BPA market in recent years,” he said.
“I’m particularly pleased that [CEO, retirement solutions] Tom Ground and his team have swiftly secured a 12% share of the individual annuity market, having only re-entered in 2023.
“We remain disciplined in capital deployment while developing propositions that meet customer needs.”
