Life and pension business rose by 10 per cent in the second quarter of this year, according to figures from the Association of British Insurers.
The ABI’s latest statistics show that new life and pension business rose to £4.5bn in the second quarter from £4bn in the same period last year.
Individual pension business increased by 19 per cent to £1.6bn from £1.3bn on an annual premium equivalent basis.
Total single-premium new business in the second quarter of this year rose sharply to £28bn from £23bn in the second quarter of 2006 while total regular-premium new business fell slightly from £1.7bn to £1.6bn in the same period.
Total single-premium individual pension new business rose by 71 per cent to £7bn from £4bn. The ABI says this was mainly due to a change in timing of the payment of Department of Work and Pensions rebates, which will now be paid to savers earlier in the year.
An ABI spokesman says: “These figures show that the long-term life and savings market in the UK is in good health.”
But there is concern that much of this growth is business being recycled between product providers rather than new money coming in.
Axa Life executive director Paul Evans warned earlier this month that although the industry is seeing sustained growth in personal pension business, surrender levels remain stubbornly high.
Evans says: “Although we are seeing sustained growth in personal pensions, we are also seeing a sustained level in surrenders. There are substantial outflows of with-profits and personal pension business across the industry. I am increasingly concerned that the life companies are just writing cheques to each other. Retention of business is becoming increasingly important.”
Skandia UK chief executive Nick Poyntz-Wright has called for the industry to follow the company’s lead and provide net sales figures so that the true level of redemptions can be monitored more easily.