You are here: Home - Retirement - Retiring now - News -

Royal London reports strong profits as pension freedoms spike sales

Written by: Karin Wasteson
Royal London’s profits increased in the first half of the year, largely due to the success of its drawdown and individual pension sales.

The individual pensions and drawdown new business increased by 64% to £2.9bn. Meanwhile, the company’s new life and pensions business rose by 45% to £6bn – from £4.2bn in 2016.

“The strong new business performance in the first half of the year reflects growth in the overall market size and significant success in our proposition, particularly the Drawdown Governance service,” the British mutual life insurance and pensions company stated in its results report published today.

Royal London’s European Embedded Value (EEV) operating profit before tax increased by 34% to £185m, assisted by a 71% increase in strong new business profit of £149m, particularly in pensions, consumer and Royal London Asset Management.

George Osborne’s introduction of new pension legislation have led to an increased demand from savers to buy drawdown policies.

In November, regulator, the Financial Conduct Authority (FCA), capped a penalty imposed on savers for pulling out of retirement schemes early, in order to make it easier for them to switch between products.

According to Royal London, the FCA’s introduction of the early exit charge cap saw the company grow new business in 2017, primarily through its focus on “offering products which are good value for money”.          

“Our strategy remains to deliver excellent value for money by focusing on creating the best customer outcomes and best customer experiences at really competitive prices,” said Phil Loney, group chief executive of Royal London.

He added: “This philosophy is rooted in our status as a mutual. The growth in profit and new business sales we announce today underlines the continued success of our strategy.”

Royal London also said that the secondary market, where advisers recommend schemes move to take advantage of better quality scheme administration or investment options, is starting to emerge and that the company will increasingly focus on this market going forward.

Moreover, it will pilot a new Diabetes Life Cover product and use technology to enhance the company’s services to customers and advisers.  

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Insurance Experts: Are you fully insured? Click here to get a quote.

For a free quote or to speak with an insurance expert call 0800 1218744

Grandparents and carers may be missing out on tax credits

As many as 90,000 grandparents and family members who look after young children may be missing out on National...

Days left to transfer your Help to Buy ISA to a Lifetime ISA

If you want to take advantage of the special rules surrounding Help to Buy ISA transfers to a Lifetime ISA in...

Buying a property with a short lease: what you need to know

Research has revealed there is widespread ignorance among homeowners over the length of their leases, and the...

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

Tesco expected to post significant write-offs

Tesco is predicted to unveil the biggest loss in its 100-year history, according to analysts.

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Top tips and destinations for your teen’s gap year

Thousands of students have just opened their A-Level results and while many have secured a university place starting this autumn,...