View more on these topics

This week in Pensions

After more than a year immersed in the glamorous world of regulation I find myself lured towards pensions, like the proverbial moth to a flame. But blinded by the light on my second day as pensions reporter, I also find myself flapping around without any juicy stories to speak of. So bear with me just this once and please pretend that painful analogy didn’t happen.

Scottish Life managed to announce an eight per cent increase in life and pensions business for the half year ending June 2006 and have a pop at its competitors in one breath.

With total new life and pensions business on a present value of new business at Royal London increasing by 15 per cent to 949m the firm made a back-handed swipe to rivals chasing market volume and indicated that it would not be dragged into a price war to plump up its figures.

Group finance director at Royal London Stephen Shone said: “In the pensions market, Scottish Life has continued to very deliberately target profitable new business. We have taken a firm decision that we will not destroy capital by writing business which can only ever be profitable on paper – and then only if unrealistic assumptions are made about
future persistency.”

Shone added that IFAs are increasingly using its fee payment system to help build a sustainable business model, without the need to regularly rebroke pension plans around the market.

Some cynics might suggest the firm is justifying its relatively modest growth in new business compared to the 39 per cent boost in total life and pensions sales at Friends Provident, for example.

But Royal London group media communications director Alasdair Buchanan says many of its rivals are writing unsustainable, low level business offering high commissions. Buchanan says this is indicative of the persistency problems highlighted in Ned Cazalet’s Polly Put the Kettle on Report, with IFAs understandably shifting their clients between policies to chase better deals once they move beyond the clawback period. As Cazalet pointed out in his report, with many policies taking ten years to make any profit, this rebroking is having a negative impact on life offices.

Meanwhile Work and Pensions Secretary John Hutton gave fresh hope to the 125,000 workers which lost their savings when the pensions schemes collapsed. In an interview on BBC Radio 4 over the weekend Hutton revealed he is working on plans to restore a state second pension – which the victims would have opted out of when they joined their employers’ scheme – for some of those affected. He said the department is also pursuing the companies that had folded their schemes despite being still solvent.

Hutton said he is “looking urgently to see if we can find a way forward” and added: “If you can’t recover or restore the occupational pension, we might be able to restore the rights to the state second pension.”

Hutton’s proposals, however adequate or inadequate they prove to be, at least show it will not be able to wriggle out of doing something to compensate workers for its own failings identified by the parliamentary ombudsman.


Exchange runs new roadshows

The Exchange is running a series of new business roadshows across the UK open to all Exweb portal users and potential users.Events will take place in August and September in Harrogate, Exeter, Manchester, Cambridge, Birmingham, Gatwick, Edinburgh, and Glasgow.The events aim to present the business case for using technology to help advisers improve their business […]

Helm Godfrey takes over Massow’s Fresh Finance

Helm Godfrey has taken over Fresh Finance, the specialist IFA firm which was originally set up for the gay community by Ivan Massow. The deal, which comprises the business and assets of Fresh, will see Helm Godfrey take on Fresh’s four advisers and assimilate its Tamworth office into its branch network. The acquisition takes Helm […]

Our survey says…

I have always wondered what it must be like to work in PR. A few years ago, when I first struck out in the freelance world, I was contacted by two or three lovely people who asked whether I might like to come in for a chat with them.

Stop the cold-calling

Royal London is pleased to support the petition calling for a ban on cold-calling for pension and investment products. The petition, launched by IFA Darren Cooke of Red Circle Financial Planning and hosted on the Parliamentary website, calls on the Government to ban cold-calling for pensions and investment products. A similar ban is already in force […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm