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In particular, sales of single premium products at Skandia UK and International were down a combined 40 per cent, in what Old Mutual said was a reflection of low consumer confidence in these markets.

This decline in the traditional sector was, however, partially offset by a significant increase in sales on the Skandia's wrap platform, rising an impressive 62 per cent largely due to the company's decision to remove initial charges in September last year.

Overall, Old Mutual said total sales in the UK were consistent with the fourth quarter of 2008.

Meanwhile, overall group sales for long-term savings fell 14 per cent during Q1 to £315m, down from £368m in Q1 2008.

Julian Roberts, group chief executive, said: 'The group has delivered a solid performance for the first quarter despite the operating environment being profoundly different to the same period last year.

"Sales were affected by a shift in consumer sentiment, the closure of Bermuda to new business and the deliberate downsizing of our US life business. Our Nordic and South African businesses, where we have significant scale, once again performed well.

"Funds under management have held up well over the past year relative to the marked fall in equity markets, and we continue to tighten expenses across the group.

"Strengthening our capital position remains a key priority for the group and I am pleased to report that our FGD (Financial Groups Directive) surplus now stands at £900m, a significant increase on the year end principally as a result of accrued profits and a Nedbank subordinated debt issue."