Pru pension sales plummet

Prudential is paying the price of cutting out commission on regular-premium pensions, seeing sales of individual policies plummet by 43 per cent through IFAs in the first quarter of this year.

The company stopped offering initial commission on its former Scottish Amicable-branded regular-premium pensions products in August last year.

Intermediary sales of individual pensions, which include group personal pensions, fell by 43 per cent to £12m from £21m on an equivalent premium income basis for quarter one. Single-premium business was down by 41 per cent to £32m from £54m and regular-premium sales were down by 40 per cent to £9m from £15m.

Across both direct and intermediary channels, individual pension sales were down by 30 per cent to £16m from £23m. Corporate pension business was down by 2 per cent to £59m from £60m, despite a 50 per cent rise in corporate business through intermediaries.

The figures follow months of upheaval in Prudential&#39s UK operations, with the decision to kill off the ScotAm brand and disband its appointed representative salesforce to focus on bond and annuity sales.

In contrast, Scottish Life saw new individual and group personal pension business for the first quarter rise by 39 per cent to £26.1m from £16m on an EPI basis.

Prudential senior media relations manager Darragh Leeson says: “There is an element of the commission cut having an impact on sales. We are operating in parts of the market where it is profitable to do so. Over the past year we have evolved our focus to look at larger schemes.”