Just Group says sales of its lifetime mortgage advances slumped by 68% to £164m compared to a year ago, as it looks to focus on other areas in later life financial services.
The listed financial services group saw its equity release business suffer as higher interest rates hit demand.
The unit underperformed the wider market, as lending in this sector tumbled 62% to £2.1bn last year as plan sales and drawdowns fell, according to Key’s Equity Release Market Monitor 2023 last month.
However, Just Group will focus on faster-growing areas, such as retirement income sales from annuities, rather than trying to lift its equity release business.
“Lifetime mortgages at £5.7bn represent 24% of the investments portfolio, which we expect to continue drifting lower over time as we originate fewer new lifetime mortgages and diversify the portfolio with other illiquid assets,” the group says in its full-year results statement.
The listed group posted underlying operating profit up 47% to £377m, boosted by retirement income sales, which jumped 24% to £3.9bn.
Its defined benefit pension sales “continues to thrive” lifting 21% to £3.4bn from a year ago.
Just Group chief executive David Richardson says he is “confident of exceeding our medium-term profit growth pledge.
“As such, we now expect to achieve our target of doubling profits in three years instead of the originally intended five.
“Given the multiple opportunities available and strong structural growth drivers in our chosen markets, we have never been more confident in our ability to deliver sustainable and compounding growth.”
Shares in the firm jumped 14.8% to 102.4p in late trading.
