ROYAL London, the largest life and pensions mutual in the UK, which employs around 1,250 people in Edinburgh, has recorded strong growth in profits as it continues to feel the benefit of pension reforms.
The company increased operating profits by 34 per cent to £185 million in the six months to June, from £138 million in the same period last year helped by strong growth in new business.
The company said profitability was boosted by a very strong performance in new pensions business, including drawdown products. These allow people to take money from their pension pots directly rather than buying an annuity.
Individual pensions and drawdown new business sales rose 64 per cent to £2.9 billion, from around £1.8bn last time.
Chief executive Phil Loney said the company had consolidated its position as one of the new business leaders in the pension and drawdown markets during 2017.
It has been one of the main providers of new workplace pension schemes under the official auto-enrolment initiative.
Group Pensions new business sales increased 32 per cent, to £2.5bn in the first half, from £1.9bn.
However, Mr Loney said the Financial Conduct Authority needed to do more to encourage people to take impartial financial advice when contemplating Income Drawdown.
Royal London noted signs new auto-enrolment business will slow. The deadlines for longer established firms to introduce schemes was 1 April.
Sales of protection products through intermediaries increased by 34 per cent to £384m from £287m.
New protection sales direct to consumers rose 43 per cent to £229m from £160m.
The company confirmed plans announced in March in the wake of the UK starting the Brexit process to establish a subsidiary in Ireland to handle the business it does in the country.
It has no plans to transfer any staff to Ireland from the UK.
Mr Loney said: “We expect to maintain strong capitalisation and profitability as the UK leaves the EU.”
Royal London employs 100 people in Glasgow, out of a group total of 3,450.
It dropped the Scottish Life brand in 2014.
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