Wed, 19th Mar 2014
The FTSE 100 slipped by 25.5 points following the Budget on Wednesday. The UK’s leading index was dragged down by insurance companies, who saw their share prices plummet after the news of a massive overhaul for pensions.
Following the Budget, around 13 million savers are set to be given access to the whole of their pension funds from age 55. This news is being seen as a death blow for annuities, and caused Resolution to slip by ten percent, down to 317.4p, while Legal and General lost 13 percent, to 200.8p. Other pension companies to suffer included Aviva, who lost six percent, Standard Life, who lost five percent, and Prudential, who lost two percent. Perhaps the worst hit, however was Partnership Assurance Group, whose share price dropped by 54 percent, falling by 173.75p.
Collectively the insurance companies took approximately 18 points off the value of the FTSE 100, highlighting how poor value annuities were, and how much of a profit driver those products were for the insurance companies themselves.
Another industry that suffered after the Budget was that of the bookmakers. George Osborne announced that the duty on fixed-odds betting terminals will increase to 25 percent, from 20 percent. This news saw Ladbrokes’ share price slip by twelve percent, and William Hill’s share prices slip by six percent.
Overall, the index slipped by 25.5 points, closing at 6,579.8 points as the overall mood in the markets was one of pessimism both on the UK front, and internationally.