LLOYDS Banking group will sell a £6bn bulk annuity portfolio from its Scottish Widows business to pensions insurance specialist Rothesay.

The companies said in a joint statement that the portfolio covers the pension benefits of around 42,000 people and that the deal would allow Lloyds to focus on growing its "strategically important lines of business".

Lloyds said the financial impact of the sale on its group would be immaterial.

Bulk annuities are insurance policies brought by pension plans to offload the long-term risks of their defined-benefit pensioners. Such deals have become more attractive in recent months as rising gilt yields improved pensions' funding positions.

Chira Barua, chief executive of Scottish Widows and head of insurance, pensions and investments at Lloyds, said: "This sale will enable us to focus and invest in the insurance, pensions, investments, retirement and protection markets where we want to grow, whilst ensuring positive outcomes for our bulk annuities customers."

Experts have predicted that the UK bulk annuity market, which has grown in popularity in recent years, will hit a record value of more than £50bn in 2024.

(c) 2024 City A.M., source Newspaper