Royal London sales surge on drawdown boom

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A surge in drawdown sales helped push Royal London’s new life and pensions business up 35 per cent to £4.9bn in the nine months to October.

Drawdown sales grew 67 per cent year-on-year, from £578m to £966m.

Sales of individual pensions were up by 52 per cent, from £949m to £1.4bn, and workplace pension sales rose 11 per cent, from £1.7bn to £1.9bn.

Overall, new life and pensions business rose 35 per cent to £4.9bn, up from £3.6bn.

However, new business inflows at Royal London Asset Management were down by £400m, to £2.5bn, compared to the same period in 2014.

The Ascentric wrap platform saw gross sales rise 19 per cent, to £1.9bn. Total group funds under management up 1 per cent to £83.1bn from £82.3bn.

Royal London group chief executive Phil Loney says: “We have now come through the initial period of pension freedoms and we have seen new trends emerging in the market.

“Clearly a lot more advisers are recommending income drawdown for their clients and we have seen advisers choosing to transfer their clients into our flexible personal pension arrangement in anticipation of exercising freedoms at some point in the future. ”

Loney reiterates the firm’s opposition to the potential switch from the exempt-exempt-taxed, to taxed-exempt-exempt model of pension saving.

He says: “Nobody should be asked to save for 30+ years without absolute certainty that savings made from their income will not be taxed twice. The public will not trust future cash strapped governments to honour any current promise of a tax free Isa-style income in retirement.

“We urge the Treasury to focus its review of pension tax incentives on reforming the current up front tax relief system to make it simpler to understand and fairer for all, considering proposals such as a single rate of tax relief on a 2 for 1 basis.”

In October Royal London introduced profit sharing for the vast majority of its pension customers.

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