THE CHIEF executive of Royal London yesterday welcomed controversial changes to pensions in the Budget, as the insurer unveiled a 72 per cent rise in profits.
Last month chancellor George Osborne pledged to abolish compulsory annuities, meaning that from 2015, people can withdraw as much of their nest egg as they like, subject to marginal tax rates. The move caught the industry off-guard and wiped billions off the total value of Britain’s largest annuity providers.
“We welcome the removal of the requirement to convert pension savings into an annuity,” said Royal London boss Phil Loney.
“Greater flexibility is certain to improve the attraction of pensions as a savings vehicle at just the time when more people than ever are joining corporate pensions as a result of automatic enrolment.”
Royal London posted pre-tax profits of £551m, which included a £150m one-off gain from the acquisition of The Co-operative Group’s life, pensions and asset management business last July.
Group funds under management rose 48 per cent to £73.6bn in 2013, which included £20.4bn from the Co-operative deal.
The firm disposed of its offshore unit Royal London 360 last year.