Royal London hits assets record amid pension push
Royal London recorded a new record high for assets under management, as the group was buoyed by resilient market activity and an influx of pension wealth.
Assets under management (AUM) climbed to £212bn, up from £199bn at the end of the last financial year, driven by positive market movements and investors taking the “Iran war in their stride”.
Royal London chief executive, Barry O’Dwyer, said: “There have obviously been impacts in parts…but the market has proved incredibly resilient despite everything that’s happening in the outside world.”
Gross inflows remained flat at £22.4bn, while net inflows tumbled from £4.1bn to £1.8bn. The group pinned the decline on the inflows last year receiving a significant boost from winning a £4.6bn multi asset mandate with St James’s Place.
The mutual recorded a 13 per cent increase in operating profit to £187m, bolstered by higher contributions from both its protection and workplace pension propositions alongside asset management.
Pension system shakeup
Pension new business sales increased five per cent to £4.7bn, primarily driven by its workplace pension channel.
The segment reported a 13 per cent rise in sales to £2.4bn supported by higher transfer volumes and new entrants to the market. This lifted customer numbers by 112,000, taking the total to 2.3m.
O’Dwyer said the customer growth reflects “people having more focus on their retirement plans and consolidating old pensions into their new workplace providers”.
Workplace AUM increased by 15 per cent to £43.6bn.
Protection sales posted a six per cent increase to £438m, as the group saw more activity among its high-net worth business, as customers opted to deal with their pensions prior to the changes to the system in April 2027.
From the next financial year pensions will fall into the scope of inheritance tax (IHT).
O’Dwyer said: “It doesn’t take that much for people to be in that inheritance tax net, so a lot of these people are buying life insurance in order… to pay the tax bill when it comes.”
During the first half of the year, the group paid out 98 per cent of protection claims, sending customers £392m.