MARKET REPORT: Pension companies on the rise as Reeves rings the modifications

Pensions were in the spotlight yesterday as Chancellor Rachel Reeves unveiled sweeping plans to create UK retirement megafunds and Aviva published well- received third-quarter results.

The FTSE 100-listed company saw its retirement income jump by 67 per cent to £7.3billion in the nine months to September 30, thanks to a near doubling in volumes of bulk-purchase annuities sold.

The financial services firm, one of the UK’s biggest players in the sector, also saw its net investment flows rise by 21 per cent to £7.7billion, partly reflecting good growth in workplace pensions.

Pensions shake-up: Aviva saw its retirement income jump by 67% to £7.3bn in the nine months to September 30, thanks to a near doubling in volumes of bulk-purchase annuities sold

Aviva chief executive Amanda Blanc said that after a very strong third-quarter performance, trading continued to be extremely positive right across the business.

She added that the insurer remains confident about the outlook for the rest of 2024 and beyond. 

That confidence fed through to Aviva’s share price, which gained 4.6 per cent, or 20.7p, to 475.4p.

Elsewhere in the pension world, Just Group rose 2.5 per cent, or 3.4p, to 139p. 

The retirement products business revealed it had completed its largest defined benefit de-risking transaction to date, securing a £1.8billion full buy-in with the trustee of the G4S Pension Scheme.

In wider markets, the FTSE 100 Index recovered some poise after recent falls that saw it skirt the 8000 mark. 

It closed up 0.5 per cent, or 40.86 points, at 8071.19, while the FTSE 250 index added 0.8 per cent, or 163.6p, to 20522.81. A big batch of results provided the fuel for the rise of both indexes. 

Stock Watch – Deltic Energy

Deltic Energy surged higher after revealing it expects the first gas from the Selene prospect in 2028.

The AIM-listed North Sea oil and gas explorer – whose partner in the joint-venture is Shell – also told investors that total drilling costs for the discovery well at Selene are estimated to be below the cap stipulated in its farm-out arrangement.

Deltic shares gained 13.2 per cent, or 0.6p, to 5.15p, but they are down by more than 70 per cent so far this year.

Engineer Spirax Group was a top blue-chip gainer, up 4.7 per cent, or 300p, to 6670p as it reported strong sales growth in the ten months to October 31, despite a tepid market backdrop where conditions remain challenging. Analysts at Shore Capital upped their rating for Spirax to ‘hold’.

3i Group rose 3.5 per cent, or 117p, to 3447p as the private equity and venture capital company posted a 20 per cent jump in its half-year diluted net asset value per share and lifted its interim dividend by 15 per cent.

And discount retailer B&M gained 5 per cent, or 19p, to 398.8p as it reported improved first-half figures as cost pressures continued to drive demand, with group sales up 3.7 per cent to £2.64billion. 

On the FTSE 250 index, First Group accelerated by 6.1 per cent, or 8.3p, to 145.1p as the bus and train operator unveiled a new £50million share buyback alongside an upgrade to its full-year forecast.

Construction giant Kier Group rose 8.4 per cent, or 11.6p, to 150.6p as it said it had made a good start to the new trading year.

Footwear firm Dr Martens added 6.2 per cent, or 3.35p, to 57.7p as analysts at Goldman Sachs raised their rating to ‘neutral’ from ‘sell’.

Keller fell 9.8 per cent, or 160p, to 1476p after a trading update. The ground engineer cited challenging conditions in many markets, although it still confirmed it is on track to meet full-year expectations.

Defence business QinetiQ lost 9.2 per cent, or 42.8p, to 423.2p as it left its 2025 guidance unchanged after delivering first-half results in line with expectations, with its order backlog declining by 6 per cent year-on-year.