Rothesay Life in talks to buy Aegon's UK annuity book - source

LONDON (Reuters) - British insurance firm Rothesay Life is in exclusive talks to buy the 9 billion pound UK annuity book of Dutch insurer Aegon, a source familiar with the matter said on Friday.

Pensions reforms in Britain have halved the sales of annuities, which give a fixed income for life, as over-55s no longer need to use their pension pots to buy them. But specialist firms can use technology and economies of scale to generate cash from existing annuities, industry specialists say.

Aegon said in September it was reviewing its annuity business.

Rothesay Life's backers include Blackstone and Goldman Sachs.

(Reporting by Carolyn Cohn; Editing by Ruth Pitchford)