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ScotLife says financial strength secured

Scottish Life claims its new deal with Royal London is a vote of confidence for the IFA sector.

The life office claims the deal has put paid to much of the speculation over its future survival in the low-cost post-stakeholder pensions arena by providing the company with the financial strength to compete with bigger rivals.

ScotLife announced the deal last week, claiming it is a good match, with both parties bringing something to the table. It means ScotLife now has more financial security and Royal London has access to the IFA market.

ScotLife will benefit financially after what it describes as a “frustrating” time as it did not have enough capital.

The company says the combined group will be in the top 12 of UK life and pension providers and will have funds under management of £28.6bn, made up of a combination of ScotLife&#39s £9.8bn and £18.8bn from Royal London.

ScotLife members will receive a £500 cash payment for the loss of their membership rights. With-profits policyholders will get a shareof £829m in the form of enhanced final bonuses.

ScotLife chief executive Brian Duffin says: “The deal is a strong vote of confidence for the IFA sector. Despite all the regulatory challenges, IFAs have prospered. Royal London wanted to find a way of accessing the IFA channel as IFAs are a growing sector.”

l Alasdair Buchanan, p16

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