There will be a pensions crisis in the future if the industry does not make further progress, according to Royal London’s departing chief executive, Phil Loney.
Since the introduction of auto-enrolment in 2012, and pension freedoms just two years later, mutual life, pensions and investment provider Royal London has been actively growing its flexible pensions products, and overall business offering.
With the slow death of annuities, businesses such as Royal London have had to continue to adapt to be able to survive in an ever-changing and increasingly regulated pensions environment.
In doing so, businesses have had to deploy different strategies along the way. But what roads precisely have led to the successes of providers such as Royal London?
Pensions sea change
During his seven-year tenure, Mr Loney (pictured) says he has witnessed “a sea change in the long-term savings industry”, and “a massive shift in the responsibility for saving for the future” that has been very much driven by AE and the pension freedoms.
Mr Loney – who announced last month that he will be standing down by the end of 2019, once a suitable replacement is found – has driven many significant changes at the insurer, campaigning on a range of topical pensions issues, to become a leading voice in the industry.
He explains: “As an organisation that is run in the interest of its members, we had to think about how we were going to contribute to the biggest social change in pensions, which was AE.
“So we chose to get ourselves really immersed in it, deciding to use the opportunity in AE to become a really big player.”
By the time pension freedoms came along, Royal London was already well positioned, he says. “And in two years, drawdown became the retirement income vehicle of choice, and we continued to improve our product and investment proposition to became a major player.
“We positioned ourselves well for what we could see coming, and used our position as a mutual to try and engage people with their pension.”
- The pension freedoms have had a huge impact on pension companies.
- In 2014, Royal London rebranded to bring all of its brands under one umbrella.
- Chief executive Phil Loney is stepping down some time this year.
Mr Loney also led Royal London’s transformation from a collection of individual brands acquired a decade ago – such as Ascentric and Fundsdirect in 2007, and Phoenix Life Assurance in 2008 – to form a single brand.
In 2014, Royal London rebranded to its iconic purple pelican logo in a bid to bring all the big businesses – Scottish Life, Scottish Provident, Bright Grey and Royal London Asset Management – under the Royal London umbrella.
In the past four years, the company has doubled in size with top three market share positions in intermediated protection, pensions drawdown, funeral plans and 50+ life assurance.
Since joining in 2011, Mr Loney has overseen 154 per cent growth in assets under management to £117bn at the end of June 2018 from £46bn.