Prudential has revealed it has set aside a total of £175m to cover the cost a review of non-advised annuity sales and potential redress.
In its annual results, published today, Pru says the provision has contributed to lower operating profits for the UK business, down 31 per cent to £828m.
Money Marketing revealed last month that Pru had agreed with the FCA to carry out a past business review into whether non-advised customers were given sufficient information about the option for an enhanced annuity.
Standard Life is carrying out a review of its non-advised annuity sales and has also set aside £175m to cover the costs.
Pru says: “The FCA’s thematic review of non-advised annuity sales practices showed that, in a portion of annuity sales that the UK business made since July 2008, it was not adequately explained to customers that they may have been eligible for an enhanced annuity.
“We are continuing to work to ensure we put things right.”
Separately, Pru says its advice arm Prudential Financial Planning has now become a top 10 UK advice business, with the number of adviser firms up 37 per cent since 2013.
M&G, Pru’s fund management division, saw operating profits fall 4 per cent last year from £442m to £425m.