Where Aegon’s pension customers have a guaranteed annuity rate or guaranteed minimum pension, these will continue to be honoured but with an annuity set up by Legal & General instead of Aegon, the life insurer said in a statement on Wednesday.
Aegon has not been an active player in the UK annuity market since 2010 and has said the sale of its portfolio of existing annuities was in order to focus on its platform and protections business.
In announcing the L&G deal, Aegon UK’s chief executive Adrian Grace reiterated the strategy. “Not having been an active player in the annuity market for some time, it made perfect sense to sell our £9bn annuity portfolio, and concentrate on accelerating the growth of our platform and protection businesses," he said.
The moves come as the annuity business in the UK is going through a major upheaval as a result of the government’s pension reforms which granted savers unrestricted access to pension pots, scrapping the need for people to buy an annuity. The changes have brought about a sharp fall in annuity sales.