Standard Life chief ‘acutely aware’ of UK retirement crisis as Phoenix Group ups goals: shares jump

Standard Life’s chief executive said he was “acutely aware” that the UK was facing a retirement crisis as parent company Phoenix Group upped its medium-term targets following solid full-year figures.

Andy Curran said the Standard Life business continued to “perform strongly across all metrics” as it supported people with the “ongoing shift in responsibility for their own retirement savings and income”.

The historic life assurance and pensions provider, which was founded in 1825 and acquired by Phoenix Group in 2018, revealed 13 per cent growth in workplace net fund flows of £5.3 billion, compared with £4.7bn a year earlier, taking workplace assets under administration (AUA) to £66.5bn. Some £5.1bn of premiums were written in the year, down from £6.2bn in 2023, with a “disciplined capital deployment” enabling the business to achieve a top five average position in the bulk purchase annuity market over the last three years.

The historic Standard Life business was founded in 1825 and acquired by Phoenix Group in 2018.

Standard Life said it had rapidly built a 12 per cent market share of the individual annuity market having re-entered the arena in 2023.

Curran said: “We’ve delivered profitable growth, in both our Standard Life pensions and savings and retirement solutions businesses with IFRS [international financial reporting standards] operating profit up 66 per cent and 25 per cent respectively, while introducing new products and services to widen the appeal of Standard Life to both existing and new customers, as they navigate the journey to retirement and beyond.

“While these numbers point to strong growth, we are acutely aware that the UK is facing into a retirement crisis,” he added. “With only one in seven UK adults saving enough for retirement and only 10 per cent receiving financial advice, we continue to focus on engaging regulators and government to bring about change so people can save more when in work, but also secure better incomes when in retirement.”

His comments came as life insurer Phoenix Group Holdings’ full-year results showed a solid solvency position and an improved outlook, pushing its shares higher. The FTSE 100 group delivered total cash generation of just under £1.8bn in 2024, down from a little over £2bn the year before but better than the top end of previous guidance and comfortably ahead of the £1.5bn average analyst forecast.

Andy Curran, chief executive at Standard Life, part of Phoenix Group.

The board is recommending a 2.6 per cent increase in the final dividend to 27.35p per share, taking the total payout to 54p per share, as part of a “progressive and sustainable” dividend policy.

The group upgraded its cash targets, and is now expecting operating cash generation to grow by a “mid-single digit” percentage per year in the coming years, with its three-year target for cumulative total cash generation increased to £5.1bn, from £4.4bn, between 2024 and 2026.

Group chief executive Andy Briggs told investors: “We made good progress in 2024 executing our three-year strategy, delivering sustainable and profitable growth in both our pensions and savings and retirement solutions businesses. This has supported strong 2024 financial performance across our key metrics of cash, capital and earnings.

“We are ahead of plan from both a strategic and financial perspective, delivering operating cash generation of £1.4bn two years ahead of our 2026 target.

“Our strong performance in 2024 and the operating momentum we have built will support us in delivering our growth strategy and have led us to upgrade our cash generation and adjusted operating profit targets through to 2026. Delivery will give us the financial flexibility to reduce our leverage, while also sustaining our progressive dividend for shareholders. It also brings us closer to realising our vision to be the UK’s leading retirement savings and income business.”

Richard Hunter, head of markets at investment platform Interactive Investor, noted: “In opening exchanges, Phoenix Group was the star performer, rising by more than 5 per cent after upgrading its profit outlook, which read across to the likes of Legal & General and to a lesser extent Prudential, which reports its full year numbers on Wednesday.”

Phoenix Group bought Standard Life Assurance in 2018, then in 2021 it acquired the iconic Standard Life brand after funds giant Standard Life Aberdeen opted to change its name to Abrdn - a name that is now reverting back to Aberdeen.

Scottish workers recently emerged as the most confident in the UK that they can stay in work until retirement age. Meanwhile, Scots ranked towards the middle for job satisfaction, but financial security and economic activity remain in the bottom half, according to Phoenix Group’s new “employment index”.

The research ranked Scotland fifth in the UK for overall employment, but Scots were found to lead the way in having the confidence they will remain in work into later life.

The index was based on a combination of 13 metrics drawn from research among 6,000 working UK adults and Office for National Statistics (ONS) data. It ranked UK countries and regions across four categories - job satisfaction, confidence in ability to be in long-term employment, financial security and economic activity levels.

Gail Izat, managing director for workplace and intermediary at Standard Life, said: “Ensuring people across Scotland have access to stable, fulfilling work for as long as they need or want is key to addressing the pension under-saving crisis. The ability to work and save for longer can make a real difference to financial security in later life.

“With 17 million people [across the UK] already not saving enough for retirement, good quality, sustainable employment is vital to closing the pension savings gap, as well as improving economic growth and productivity across Scotland and the UK.”

Scots most confident in UK of working until retirement - but there is a catch