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IFAs hold on to share of a static life market

Sales of new life and pension business increased by just 1 per cent to £11.1bn from £11bn equivalent premium income in 2001, according to annual figures from the ABI.

The figures also reveal that sales of stakeholder plans increased to 1.25 million by the end of last year from 1.1 million at the end of the third quarter.

It has conceded, however, that 90 per cent of employer-designated schemes remain empty shells getting no contributions.

The ABI says 340,688 companies have designated a stakeholder scheme and it estimates that this represents the balance of companies which are required to offer access to stakeholder.

IFAs remained the most significant distribution channel last year for both single-premium and regular-premium life and pension business, accounting for 62.2 per cent of the business, representing just under £2.3bn.

They increased their share of all forms of regularpremium business but saw their single-premium business drop slightly in all areas except annuities and drawdown and group single-premium business.

Direct salesforces saw their share of regular-premium individual life business drop to 42.8 per cent from 46.8 per cent and annuities and drawdown fall to 13.2 per cent from 19.6 per cent but they increased their stake of collective investment business to 65.4 per cent from 62.1 per cent in 2001.

ABI head of life and pensions Alan Woods says: “Sales of stakeholder pensions are now running at 33,000 a month, less than half their peak of 75,000.

“The vast majority of employer-designated schemes remain an empty box, without a single member.”

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