Standard Life says it has seen pension lapses above expectations and will make further provision for lapses next month.
Its new business results for 2006 show UK life and pension sales rose strongly by 69 per cent to £11.4bn from £6.7bn in 2005 on a present value of new business premiums basis.
Standard set aside provision of £100m for lapses last September as a result of increased lapses following the delayed effect of A-Day due to the company’s demutualisation.
Group chief executive Sandy Crombie attributed the 69 per cent growth in life and pension sales to the continuing positive influence of A-Day changes and investment performance.
Standard says it has cont-inued to focus on profitable areas of the market which offer favourable margin opportun-ities and, as a result, single-premium business outstripped growth rates of regular-prem-ium business at 89 per cent compared with 49 per cent.
On an annual-premium equivalent basis, total Sipp and drawdown sales grew by 150 per cent to £395m from £158m.
But individual pension sales fell by 7 per cent to £126m from £135m, which Standard put down to customers preferring Sipps due to the closure of its executive pension and individual buyout plans to new business after A-Day.
Sales of investment bonds rose by 66 per cent to £185m from £112m, which Standard says was driven by adding 57 external fund links.
Crombie says: “I believe our successful demutualisation has given Standard Life a platform on which to build continued growth in 2007 and beyond. We have seen particularly strong life and pension sales in the UK, driven by single-premium business such as Sipps and investment bonds. External fac-tors such as A-Day have had a positive influence.”