Buying a back book of annuities from Aegon threw off a lot of cash for Legal & General (LGEN) during the first half. Added to its own bulk annuity sales, the £2.9bn purchase helped net cash generation increase by almost half for its retirement business to £284m. This pushed overall cash generation - vital for sustaining L&G's sizeable dividend - up 16 per cent to £727m.
L&G's retirement business signed deals that should keep the cash rolling in, including a five-year deal with Santander to offer lifetime mortgages to its customers, which management estimates will bring in an extra £100m a year in business. Equity release advances increased year on year to £231m from £31m. Unsurprisingly, individual annuity sales continued to decline.