PENSIONS and savings provider Standard Life has reported a 50 per cent drop in sales of annuities in the UK since the chancellor announced an overhaul of the industry in his Budget in March.
George Osborne’s scrapping of compulsory annuities took the insurance world by surprise. Despite this, David Nish, chief executive of Standard Life, said the group welcomed the changes.
“We see this as a significant opportunity to address the UK’s savings gap by making long-term savings and pensions an even more attractive choice for savers,” Nish said in a statement yesterday.
“While it will be some time before long-term trends become clear, the negative profit impact of the changes will reflect the relatively small size of our annuity business,” he added.
Despite the shake-up, Standard Life posted positive results for the first quarter of 2014, with assets under administration up 1.5 per cent to £247.8bn. Fee revenue was also up 12 per cent to £374m.
The business also revealed good growth in Canada and in emerging markets, with the number of customers across Asia and other emerging areas up five per cent over the quarter.
Edward Houghton, senior analyst at Bernstein, said: “This is an in-line set of numbers from Standard Life, whose stock has performed relatively strongly since the chancellor’s announcement at the Budget. As an asset gatherer, Standard Life is well-positioned to capture a good share of UK auto-enrolment and platform flows.”