Legal & General, one of the UK`s largest pension and insurance companies, tried to reassure investors days after its pension fund clients were hit by sudden rate hikes and market volatility. Pension and insurance company says it was not a forced seller of government bonds You can also email us at If you provide customer information, be sure to encrypt your message. Pension funds tend to be large bondholders because they offer a relatively risk-free way to guarantee payments to retirees for many decades. Bond prices generally move relatively gradually, but pension funds continue to take out insurance – cover policies – to protect themselves in order to limit their exposure. A rapid fall in UK government bond prices could render these hedges ineffective. The money deposited in the bond is invested in a profit fund with the savings of other insureds. The premiums are then added to the policy based on the evolution of investments in the for-profit fund. These bonds usually have a minimum final value (known as an insured sum) that is added to any bonuses that become due when the money is taken. In a stock market update on the exchange, the company said market volatility increased significantly in the second half of the year, but it had no difficulty meeting its collateral requirements and had not been a forced seller of UK bonds or government bonds, known as gilts. Most bonds are issued at a fixed interest rate and the return is the return on investment. If the Bank of England cuts interest rates, fixed yields on gilts become more attractive and prices rise. However, when interest rates rise, UK government bonds become less attractive and prices fall.

So when bond prices fall, bond yields rise, and vice versa. It is also possible for bonds to offer life insurance. This could be based on the value of the policy or the age of the insured person at the time of death. When the Bank of England buys bonds, it is called quantitative easing (QE) because the bank pays for the bonds it buys by creating electronic money that it hopes will find its way into the financial system and the economy in general. Quantitative tightening (QT) has the opposite effect. It reduces the money supply by selling assets. Bonds are investment guidelines that can run for a specific period of time or indefinitely. Some bonds also allow you to earn a regular income. Legal & General was one of the first pension fund managers to pass the baton to its pension fund clients two days after the Chancellor`s mini-budget, which caused market turbulence, sent sterling to historic lows and rattled UK government bonds. When asset prices collapsed – including UK government bonds or gilts – more collateral was needed to offset pension fund liabilities, forcing funds to dump assets and borrow short-term cash. Call Legal & General on 0370 050 0955 Monday to Friday from 8.30am to 6.00pm.

Sir Nigel Wilson, Chief Executive Officer of Legal & General Group, said: “Our balance sheet and liquidity position remain strong and our business is very cash generating. We continue to work closely with our clients to support them during this period of increased market volatility. A life insurance and pension consolidator is different. Our goal is to take policy blocks from other companies rather than implement new policies for new customers. Because this is our goal, all of our systems and processes are specifically designed for the types of policies that are transferred to us. There will be some changes in the way your system is run: join more than 300,000 finance professionals who have already subscribed to the FT. Will there be any changes in the way I pay my premiums? Key Features explains how the Select portfolio bond works. There are several reasons why you may have received more than one package: If your policy is currently increased every three or five years, this will increase to annually after the transfer. When you apply for a Select Portfolio bond, we send you an illustration that also shows what you could get from that product. The figures are used that take into account your situation and decisions and are calculated based on estimated future growth rates. I haven`t received anything from ReAssure yet. Would you like to write to me? ReAssure is a “life insurance and annuity consolidator” that takes policy blocks from other companies instead of creating new ones for new ones.

This means that we are experts in the type of transfer you have just undergone. Since our inception more than 50 years ago, we have adopted the policies of several companies, including Barclays, HSBC, Guardian and now Legal & General. ReAssure will manage existing simplified fee agreements for legal and general product consultants transferred to ReAssure. For more information, see our Guide to Facilitated Advisor Fees here. The Select Portfolio bond is a bond with which you can invest a lump sum. You have the option to make withdrawals from the bond. Individual consultants receive direct commissions and a commission statement. For consultants who are part of a network, payment is sent to the network with an invoice. This website allows all cookies by default to make the experience easier, more convenient and faster for you.