Friends Life is developing a retail platform which will offer flexi-access drawdown, Isa and general investment accounts from next April, according to its third quarter interim management statement.
The statement, published today (11 November) revealed the platform’s development is “well under way” and will sit alongside the group’s existing My Money corporate platform.
It is designed to support customers in taking advantage of the new pension freedoms, offering the ability to take a portion of pension savings as a tax free cash amount, with the remainder invested in a flexi-income drawdown product.
“Equally, for those customers who wish to secure some guaranteed level of income they will be able to purchase an annuity,” the statement added.
Andy Briggs, group chief executive, said: “Development of our new retirement proposition is on track, we have further enhanced our customer engagement, and I look forward with confidence to the launch of the new propositions and the new retail platform in April next year.”
The wider group’s year to date sales volumes were up 3 per cent to £690m, while the UK division saw sales grow 11 per cent to £579m, driven by the corporate benefits and protection businesses where sales grew by 14 per cent and 11 per cent respectively.
Protection growth was been driven by sales through financial advisers, partially offset by the impact of the industry wide mortgage market review.
However, retirement income business volumes were down on the first three quarters of 2013, although only by 12 per cent despite the Budget changes, with the statement comparing this performance to the wider annuity market fall of 32 per cent in the first half of this year.
The report stated that as expected, customers are taking advantage of the opportunity to take smaller funds under the revised triviality rules.
“As a result, whilst the number of annuities sold without embedded guarantees has declined, the average size has risen resulting in sales volumes being down by just 15 per cent.”
Friends Life also noted the completion of the £760m reallocation of annuities from with-profits funds, generating £7m of sustainable free surplus per annum from 2015. The group also agreed to reallocate a further circa £650m of annuities from with-profits funds, subject to regulatory non-objection.
peter.walker@ft.com
