Historic mutual Royal London which has major Scots presence cheers jump in FY profit and net inflows

CEO hails higher pre-tax operating profit as “good news for our customers”.

Life and pensions mutual Royal London – a major employer in Scotland with offices in both Edinburgh and Glasgow city centres – has unveiled a jump in full-year profit and net inflows despite economic “uncertainty” – alongside flagging how it is debuting in the bulk purchase annuities market.

The firm, which says it was founded in 1861 in a London coffee shop and is now the UK’s largest mutual life, pensions and investment company, said operating pre-tax profit increased by about a fifth in 2023 to £249 million, which it said was driven by growth in new business contribution, active management of its base, and the benefit of higher risk-free rates. In August of last year it said the interim figure increased to £127m from £109m 12 months previously.

Workplace Pensions new business sales grew 4 per cent after adjusting for the increase in the discount rate, but the individual pensions equivalent fell, and total life and pensions new business sales were down to £9.3 billion from £10.8bn, which the mutual said suffered higher interest rates eating into the present value of new business premiums.

The life and pensions mutual is backing women's rugby. Picture: contributed.

Net inflows increased to £4.2bn, from £3.7bn in 2022, bucking the industry trend, while total assets under management increased to £162bn at year-end, from £147bn, “due to net inflows and positive market movements, particularly in the second half of the year”.

It will next month via its ProfitShare scheme distribute £163m among more than two million eligible life and pensions policy customers, up from £155m in the prior year, and it pointed out its £1.2m partnership with Cancer Research UK focused on tackling cancer inequalities.

The organisation in Scotland has offices in Haymarket Yards in Edinburgh, and on West George Street in Glasgow. It also in August 2023 said construction of its new headquarters in London, located at 80 Fenchurch Street in the City, had been finished by construction and property consultancy Thomas & Adamson, which is based in the Scottish capital. In 2022 it announced that it was implementing a permanent £1,000 salary boost for those earning less than £40,000 a year.

Royal London group chief executive Barry O’Dwyer, who was appointed to the role in 2019, commented on the latest full-year results, stating that the 19 per cent growth in pre-tax operating profit “is good news for our customers”. He added: “The profits we make are reinvested in the business to improve our offerings and service for customers, returned to eligible customers via ProfitShare, and used to support our charitable and social impact activities.

“In 2023, we welcomed 930 new workplace pension schemes, allowing us to support a further 240,000 new pension savers. The breadth and depth of our investment range attracted over £4bn in net inflows, as we grew our membership base, and delivered strong active investment performance while expanding our fund range and international reach.”

Chairman Kevin Parry also gave his thoughts: “2023 was another year of significant uncertainty, however our mutuality enables us to continue to focus on the long term and to put our members and customers firmly at the heart of our decision-making. I am delighted that our ongoing performance and continued strength has enabled us to share £163m with over two million eligible customers.”