OREANDA-NEWS. Fitch Ratings says in a new report that the UK annuity market is shifting towards bulk annuity deals and away from individual annuities. This follows the introduction of pensions freedoms first announced in the March 2014 budget. Bulk annuities are attracting more interest from insurance providers, with several completing their first bulk annuity deals in 2015 and others planning to enter the market.

We expect the bulk market to grow significantly in the next five years, despite higher costs due to low interest rates and Solvency II capital requirements. Sales of individual annuities have fallen sharply since the pensions freedoms were announced, and we believe the individual annuity market has suffered a permanent structural decline as a result of the reforms. However, bulk annuities are not just offsetting this decline but comfortably outstripping individual annuities.

The report "Bulk Annuity Market Set for Growth" is available at www.fitchratings.com.