A spike in drawdown sales has helped Royal London report a 68 per cent increase in individual pension business.
The provider says that as “customers continued to take advantage of the pension freedoms”, new business sales of individual pensions including income drawdown in 2017 grew from £3.8bn to £6.3bn.
Royal London chief executive Phil Loney says: “Royal London’s drawdown proposition served us well during a time when low interest rates made this type of product the retirement vehicle of choice.”
Sales of protection by advisers were also up 25 per cent to £807m, the company says.
Royal London claimed its platform Ascentric attracted “record inflows” on the back of a pricing change in February last year as it moved to a single standard account charge and scrapped trading fees.
The platform now has £14.4bn in assets under management, today’s results show.
However, Loney acknowledged that headwinds lay ahead for the company. For example, the company is predicting a fall in workplace pension sales as the initial stages of auto-enrolment complete.
Loney called for a period of stability in pension tax relief to continue supporting customers in saving, as the escalation of auto-enrolment will still not provide enough contributions for many people’s pensions.
He says: “Pensions tax relief has been subject to no less than six cuts in the last seven years and we are asking the government to commit to a five-year moratorium on further changes. This would help to support consumer confidence in pensions just at the time that employer and employee contribution rates are set to increase as part of the auto-enrolment project.”