Partnership Assurance hit by pension reform

George Osborne described the changes as 'the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921' (Rex Features)

Partnership Assurance has admitted it will have to tighten its belt after the pension reform announced by the Chancellor in March’s Budget hit sales.

The company, which sells pensions to people who are ill or smoke, said it had stopped hiring people and that all spending now had to be approved by finance director, David Richardson.

From next year, retired workers will be free to do what they like with their pension pot and will not have to buy an annuity, a product that Partnership specialises in.

Because of this, individual annuity sales at the company have fallen by about 50 per cent in the eight weeks since the Coalition unveiled the shake-up – although they were already down 43 per cent during the first three months of the year.

Shares in the company rose more than 3 per cent to 128p, but sharply off the 385p value they were at when Partnership listed in June.

Steve Groves, chief executive, said the company had already launched new products to offset the impact of the changes.

He added: “It is still early days in the post-Budget world, but I am encouraged by the recognition by customers and advisers that the guaranteed income for life provided by our annuities, which typically pay an annuity rate of 6 per cent to 7 per cent, continues to be attractive.”