LONDON, Feb 9 (Reuters) - Insurer Legal and General said on Monday it had entered the lifetime mortgage market with the purchase of specialist provider Newlife Home Finance for five million pounds ($7.61 million).
Lifetime mortgages enable house-owners to borrow against the value of their property, which is then paid back when they die.
“Going forward we believe an increasing number of people will access their housing wealth to help provide extra retirement income,” L&G said in a statement.
Far-reaching British government reforms, which come into effect in April, are encouraging insurers to diversify their business.
Pensioners will no longer need to buy an annuity, which gives an income for life, when they retire.
Sales of annuities have already fallen by at least 50 percent since the changes were announced last year, and some estimate annuity sales will fall by as much as 85 percent.
Rival Standard Life said last week it was entering the financial advice market with the purchase of Pearson Jones. ($1 = 0.6573 pounds) (Reporting by Carolyn Cohn; editing by Simon Jessop)