Pensions shake-up no barrier to Standard Life

Standard Life is expected to post solid full-year profits next week in a further sign that it is well placed to shrug off the impact of Geroge Osborne’s radical pension reforms which come into effect in April.

David Nishs Standard Life is tipped to unveil 550m profits
David Nishs Standard Life is tipped to unveil 550m profits
David Nishs Standard Life is tipped to unveil 550m profits

Analysts expect the Edinburgh-based life and pensions provider to reveal an operating profit from continuing operations of more than £550 million on Friday.

In his March Budget, the Chancellor gave retired people the freedom over how to spend their pension pots and remove any obligation to buy an annuity, which gives an income for life. These changes come into effect in April.

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However, brokeage Panmure Gordon expects Standard Life – run by chief executive David Nish – to suffer only a £25m impact as it operates a number of other streams of business.

Meanwhile, analysts at JP Morgan Cazenove have pencilled in an annual earnings jump of 22 per cent to £570m, driven by asset management growth offsetting the changes to the annuity market.

In September, Standard Life, which holds more than £250 billion under management, said it would sell its Canadian business for £2.2bn to Toronto-based rival Manulife Financial as it focuses on other market-leading businesses.

It said it would return £1.75bn of this cash to shareholders, adding that it has returned £3.5bn to investors since 2010.

Its UK business continues to book workers into auto-enrolment company pension schemes and last August said it looked after 1.5 million customers, adding it expects to add more than 300,000 during the course of this year.

Last week, the firm entered the UK financial advice business by buying British wealth management firm Pearson Jones from Skipton Building Society for an undisclosed sum.

In a note, Panmure Gordon said: “Despite the very positive reception to the announcement of the sale of the Canadian business the shares have underperformed its peer group which in our view has created a good buying opportunity.”