Pension-age shift lifts sales at Scottish Life

• New business sales at Scottish Life doubled in the first quarter. Picture: Rob McDougall

The minimum age at which workers can normally access their pensions was shifted from 50 to 55 on 6 April, prompting a flood of business as new clients looked to use the mutual insurer's popular asset release product.

Edinburgh-based Scottish Life's new business jumped to 586 million, helping parent company Royal London – the UK's largest mutual life and pensions group – to increase its "present value of new business premiums" by 56 per cent to 775m.

But new business at mortgage protection arm Bright Grey fell by 17 per cent to 37m as the market continued to be affected by the slowdown in the housing sector.

Life insurance provider Scottish Provident also posted a 13 per cent fall in new business to 48m, although the firm reported that its unemployment protection cover – one of only a few such products left on the market – was becoming "increasingly popular" as the economy remains sluggish.

Mike Yardley, group chief executive at Royal London, said: "This is a strong start to the year driven by an outstanding performance by Scottish Life, on the back of a record year in 2009.

"Scottish Life was a major beneficiary of the significant increase in new business relating to the change to minimum pension age.

"But even more encouraging, in many respects, was the 89 per cent increase in new business achieved in the 'normal' individual pension market."

Royal London employs some 3,000 staff, including about 1,350 in Scotland.

Yardley also highlighted the contributions made by Royal London Asset Management, which posted a three-fold increase in new business to 579m, and Ascentric, a "wrap" platform for independent financial advisors (IFAs) that allows them to view all of a client's investments at the same time.

Total assets under administration through Ascentric rose by 137 per cent to 1.47 billion.

Royal London confirmed in February that it was in discussions with Royal Liver about a possible acquisition.

The group yesterday added: "Talks are at an early stage and there is no certainty that the acquisition will take place."

The results come amid a busy reporting season for insurance and pension companies, with Standard Life last week posting a 30 per cent rise in new business to 3.4bn.

The Prudential and Legal & General are both due to publish their first-quarter results this morning, with Aviva reporting on 11 May.

As a mutual, Royal London passes a share of its profits to members – who own the company – by adding bonuses to their with-profits policies. The group traces its roots to 1858, when Refuge Assurance was founded in Manchester.