Standard Life has revealed it has refunded £17m to its Heritage with-profits fund following an internal review.
In its annual results, published today, the provider says it made the payout last year. It says this does not impact customer payments.
A spokesman says: “During 2014 we reviewed and improved the data and systems used to model the surplus emerging from the Heritage with-profits fund since demutualisation. We identified the need to refund £17m of historic payments. This has no impact on our customers or on customer payments.”
The provider is also expecting profits from its annuity business to fall by up to £15m this year in the wake of the rollout of the pension freedoms.
Standard Life says it saw a “significant reduction” in demand for individual annuities last year, and as a result is estimating that profits from new annuity business will drop by between £10m and £15m in 2015.
The margin on new annuity sales was down 66 per cent in 2014, though this was offset by a £68m gain from managing liabilities elsewhere in the business. This pushed the overall spread/margin, which Standard Life uses to measure the profitability of annuity business, from £114m to £134m.
Overall UK pre-tax profit rose 6 per cent year-on-year from £330m to £350m.
Platform assets went up 26 per cent over the year from £16.6bn to £20.9bn, while the number of advice firms using the Standard Life Wrap rose 8 per cent from 1,236 to 1,340.
Assets under management at Standard Life Investments have jumped 45 per cent from £170.1bn to £245.9bn, following last year’s acquistion of Ignis Asset Management. Excluding Ignis, third party net inflows were £6bn.
Standard Life chief executive David Nish says: “We have made good strategic progress during the year with the acquisition of Ignis Asset Management and the sale of our Canadian operations increasing focus on fee business and enabling a £1.75bn return to shareholders. We are also well positioned to deal with the far reaching reforms to the savings and retirement income rules in the UK and to support customers through these changes. Standard Life Investments has continued to perform strongly and expand internationally.”