Legal & General Group is planning to acquire 100% of lifetime mortgage products provider New Life Home Finance (Newlife) for a £5m consideration.
The deal, which is subject to FCA approval, is slated to complete during the first half of this year.
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The privately owned UK-based Newlife was set up in 2003 to manufacture and offer lifetime mortgages.
Further, Legal & General has struck a funding agreement which will make it the sole funder of new lifetime mortgages originated by Newlife.
The funding is projected to turn out to be a source of direct investment assets to back annuity liabilities of Legal & General.
Legal & General individual retirement business managing director Bernie Hickman said, "Over 60s in the UK have nearly £1.3 trillion in housing equity and we believe lifetime mortgages will become an increasingly popular way for many people to supplement their retirement income.
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By GlobalData"Legal & General’s acquisition of Newlife allows us to participate fully in this market, which we believe has huge potential. With close to £40bn of annuity assets, we have considerable capacity to provide future funding in this growing market."
