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Widows won’t wage a pension price war

Scottish Widows chief executive Archie Kane says the firm will not get dragged into a “destructive” price war to protect its market share.

Widows’ individual pension sales in the first half of this year were slightly down on last year and Kane blames the fall on rivals increasing their commission rates to unsustainable levels purely to increase their market share.

Overall, Widows had strong results across the board. Although individual pension sales slipped by 1 per cent from £141m to £139m on an APE basis, overall pension sales rose by 15 per cent from £379m to £434m.

This was largely driven by a 54 per cent increase in corporate pension sales from £102m to £157m and helped total life and pension profits increase from £289m to £311m and new business margins rise from 25.8 per cent to 28.8 per cent.

Fund sales surged by 153 per cent from £64m to £162m and gross new mortgage lending rose by 11 per cent from £11.8bn to £13bn but this was not sufficient to maintain Widows’ market share, which slipped from 9.4 per cent to 8.1 per cent.

Kane says: “Widows has had a very strong year in individual pensions last year but a couple of competitors came back with very high commission rates.

“We are not prepared to get into the kind of destruc-tive price war which the industry has engaged in in the past.”

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