Insurers offering with-profits products to new customers say they have no plans to follow Legal & General’s lead and exit from the market.
Earlier today, L&G said it was closing the funds to new business because of falling sales as a result of the introduction of the RDR.
Royal London head of corporate affairs Gareth Evans says the mutual will not be following L&G, adding that sales have not been affected by RDR.
He says: ”It’s an option for all pension customers, both group and individual personal pensions. There are no plans whatsoever to close them. Sales weren’t particularly strong before RDR, it hasn’t increased or reduced sales one way or the other.
“We haven’t been in the commission market for a long time, so RDR wouldn’t have had an effect on that.”
An LV= spokeswoman says: “LV= is committed to the with-profits market. In this low interest rate environment, we are seeing customers use with-profits products as part of their general investment plans and more specifically we’ve seen an increase in people using them for their retirement plans.
“For those who are seeking a potential uplift in their pension income and want a level of guarantee these products are an excellent solution. Looking at our most recent performance we achieved 11.1 per cent for our members, this is 2.5 per cent above the market benchmark and demonstrates the value these products can offer.”