Royal London calls for new savings culture as business volumes surge

Phil Loney, chief exec of Royal London insurance group, called for changes to rules on annuity market. Picture: Contributed

Phil Loney, the mutual firm’s chief executive, said Chancellor George Osborne deserved credit for giving the pension industry a “shot in the arm” with initiatives such as auto-enrolment, which compels employers to offer their staff workplace pensions.

Announcing a 16 per cent rise in group pensions sales and a 68 per cent jump for individual pensions, Loney said Royal London had “welcomed the liberalisation of the pension system from the outset”.

He added: “We now hope that the new Conservative government will focus on building a savings culture in the UK which replaces the debt culture of the past two decades, and helps all citizens become more financially resilient and enjoy better living standards in later life.”

Royal London’s increase in group pensions came after a record year in 2014 for the sale of workplace pensions. The chief executive also welcomed the appointment of Ros Altmann as pensions minister, and called on her to prioritise the introduction of a new “cheap and cheerful” regulated advice regime.

Loney said this could make “focused financial advice affordable for all and ensures that the pension freedoms achieve their true potential”.

He also called on the government to pass legislation to make an open market approach to annuity sales compulsory so that customers can access the best deals available. “Legislation should also ensure that consumers are protected when engaging in any secondary annuity market through a requirement to obtain financial advice before cashing in their annuity.”

Royal London, which is phasing out its Scottish Provident brand, said its asset management business also continued to do well, with the division achieving net external business inflows of £111 million in the first three months of 2015. Royal London Asset Management had net sales of £302m.

New business volumes for Royal London’s intermediary protection arm rose 32 per cent on the first three months of 2014.