Standard Life’s first-half results have revealed the margin from annuity new business sales dropped by 59 per cent in the wake of the Budget reform announcement, although this was at least partially offset by strong demand for the firm’s drawdown and auto-enrolment products.
The report showed that the insurer secured 1,018 new corporate schemes - compared to just 60 in the first half of 2013 - helped by the ‘Good to Go’ proposition for smaller businesses adding 180,000 new customers, including 173,000 through auto-enrolment.
The firm’s drawdown proposition reached AUA of over £10bn, while Sipp AUA was up 10 per cent at £24.5bn, up from £22.2bn at full year 2013.
On an embedded value basis, the insurer reported non-operating loss after tax of £93m included a £160m loss from the impact of the charge cap on workplace defined contribution pension schemes.
However, company bosses stressed that the impact of the “related ban on commission and other changes in the market” would offset this and result in “no significant net impact on our cash generation in the next few years”.
Elsewhere, Standard Life’s wrap platform saw assets under administration rise by 12 per cent to £18.6bn, with adviser firms using the platform up 4 per cent to 1,286 and the number of adviser firms with more than £20m on Wrap up 7 per cent at 245.
Around 25 per cent of Wrap platform AUA and all Good to Go default funds are managed by Standard Life Investments.
On the issue of Scotland’s referendum, the firm reiterated concerns raised in its 2013 annual report around the currency that an independent Scotland would use, European Union membership, financial services regulation and consumer protection, and the approach to individual taxation.
Paul Matthews, chief executive for UK and Europe, said: “We do not believe that further clarity has been provided on any of these issues since our 2013 annual report and accounts was published on 27 February 2014.
“We are continuing the development of our contingency plans to ensure continuity of our businesses’ competitive position and to protect the interests of our customers and other stakeholders.”
Commenting on the results, David Nish, Standard Life chief executive, said: “We have an excellent track record of succeeding in evolving markets and we are well placed to deal with the far-reaching reforms to the savings and retirement income rules, announced earlier this year by the UK government.”
