Below forecast profits for Legal & General

L&G’s operating profit rose ten per cent to £1.28bn, but came in below the £1.31bn forecast in a poll of analysts supplied by the company.

Annuity assets rose 28 per cent to £44bn, lifted by a doubling in sales of bulk annuities - products that transfer the risk of defined benefit, or final salary, pension schemes from companies to insurers.

Following changes announced last year, pensioners will from April be free to use their pension pots as they choose, with no obligation to buy an annuity. These products offer buyers regular income for life but payment rates have dwindled in recent years, leaving some retirees struggling to cope with higher costs of living.

L&G is one of the biggest players in the bulk annuity market. But individual annuity sales more than halved last year on the back of the rule changes, and L&G said it expected sales to halve again in 2015.

Legal & General Investment Management’s assets rose 16 per cent to £709bn last year.

Chief executive, Nigel Wilson, said: “Our market-leading growth businesses coupled with continuous cost reductions have given us scale and efficiency in our chosen markets.”

The company said it would pay a total dividend of 11.25 pence per share, against a forecast 11.23 pence.