Scottish Equitable costs drag Aegon to loss

Underlying earnings were halved to 9m in the three months to the end of June on the same period last year, while sales of new individual and corporate pensions also fell year on year.

Aegon said the "adverse" figures reflected "the impact of the changes we are making in UK business as we reposition it for the future".

The firm paid out 12m as part of a 60m customer redress programme demanded by the Financial Services Authority last year, as well paying an extra 6m in further expenses in the quarter. Yesterday, Aegon said the process could lead to further charges this year but that it was on track to resolve remaining problems with historic customer records at Scottish Equitable, which was acquired by Aegon in 1994, by the end of the year.

The firm also ploughed 7m into its new workplace savings platform which is currently being developed by Bath-based Novia Investment Services. The firm expects the product to be ready for a phased roll out by October.

Adrian Grace, chief executive of the Edinburgh-based pensions group, said: "Earnings this quarter reflect the investment we have made in developing our plans to offer a new platform proposition for our chosen markets of 'at retirement' and workplace savings markets alongside our existing product range."

Grace confirmed the group is also 58m into its 80m cost cutting programme, which is expected to see about 600 jobs shed from the firm's Edinburgh workforce. A spokeswoman for Aegon said it would provide an update on jobs lost later in the year, adding that the firm has a "clear road map" on the remaining cost cuts. The restructuring programme added 13m expenses in the quarter, with more to come this year, the firm said.

It is thought the potential sale of Aegon UK's Guardian Life Insurance business to private equity firm Cinven will not be a major contributor to savings .