LONDON: UK operating profit of Standard Life rose to £350m for the year compared to £330m in 2013. Standard Life has reported modest growth in its UK business for 2014, with profits before costs up nearly 6% during the year, driven by demand for the life company’s auto-enrolment workplace pensions.
Auto enrolment – the government’s initiative to get everyone saving towards a pension – drove a 16% increase in regular pensions contributions to increase UK corporate net inflows by 10% to £2.2bn last year, up from £2bn the year before.
However other legislative changes around pensions have been more mixed for Standard Life, and businesses like it which sell annuities.
Following changes announced in the Budget in March 2014, which removed the near compulsion for people to buy an annuity, the life company said it has seen a significant reduction in demand for the product.
Consequently it said it expects a “step down” in the profitability of this business in the coming years, forecasting new and ongoing annuity business to tumble by up to £55m.
It hopes to regain some ground via its Standard Life Investments arm, where it said it sees the pension freedoms – which are likely to result in more people staying invested – opening up opportunities for it to grow its multi-asset and absolute return business.
