LONDON, March 26 (Reuters) - British life and pensions groupLegal & General expects the size of the UK market forindividual annuities to shrink by around three-quarters after2015 when retirees will no longer be forced to buy them.
The forecast, delivered in a speech to an investorconference in London on Wednesday by L&G Chief Executive NigelWilson follows a radical shakeup of the pensions systemannounced by finance minister George Osborne.
L&G expects the market to shrink from 11.9 billion pounds($19.64 billion) currently, to around 2.8 billion pounds.
The reforms, due to be implemented in April next year,effectively scrap a system forcing most retirees to swap theirpension savings for an annuity that pays out an income for life,giving them a choice in how they want to invest their savings.
Wilson said L&G expects retirees to take more of theirsavings in cash and rely more on their property as a source ofretirement income.
"We certainly expect to see more cash being taken out,either singly for small pots or across several years, and weexpect to see more use of the housing asset as pots get depletedmore quickly," he said.
($1 = 0.6059 British Pounds) (Reporting by Chris Vellacott. Editing by Steve Slater)
Legal & General (LGEN)
