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Standard Life eyes ‘significant’ chance as annuity sales slide 50%

by Dylan Lobo on Apr 30, 2014 at 08:13

Standard Life eyes ‘significant’ chance as annuity sales slide 50%

A slump in annuity sales has not dulled Standard Life’s optimism it can take advantage of the big opportunity to plug the savings gap.

In a trading update, the Scottish-based firm said it welcomed the changes in the savings regime introduced in the Budget earlier this year, which saw the requirement to buy an annuity on retirement scrapped.  

The dramatic changes sparked a 50% slump in Standard Life's annuity sales in the first quarter. 'While it will be some time before long-term trends become clear, the negative profit impact of the changes will reflect the relatively small size of our annuity business,’ the firm told the market.

However, it welcomed the change, along with the introduction of a charge cap on workplace pensions, believing the positives outweigh the negatives.

‘We are pleased to have clarity on the charge cap for workplace pension schemes and we are well placed to meet the cap confirmed by the DWP. We also welcome the changes to the savings regime announced in the recent Budget and view it as a positive step forward,’ Standard Life chief executive David Nish (pictured) said.  

‘We see this as a significant opportunity to address the UK’s savings gap by making long-term savings and pensions an even more attractive choice for savers through simplicity, choice and flexibility.’

Standard Life also said it was seeing strong demand for its ‘Good to Go’ online auto-enrolment solution, which launched at the end of last year and is designed to make life easy for employers setting up schemes.    

‘We are seeing continued demand from larger employers and strong interest from the significant number of SME businesses who will implement pension schemes over the next few months under auto enrolment,’ Nish said.

‘We have already secured over 400 new schemes through our new “Good to go” proposition since its launch.’

SLI strength

Assets under administration at Standard Life increased by 1.5% in the first three months of the year to hit £247.8 billion. Fee revenue was up 12% to £374 million.

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