Pensions reform boosts Standard Life

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Standard Life on Wednesday reported a 47 per cent rise in worldwide sales to £14.3bn as it continued to benefit from last April’s reform of the UK pensions regime

The group’s UK life and pensions sales rose 69 per cent to £11.4bn, although growth in the UK market is expected to moderate in 2007 as the effect of the legislation change – known as ‘A-Day’ – works its way through.

Standard Life’s performance reflects that of rivals including Aviva, owner of the Norwich Union brand in the UK, which on Tuesday reported global sales up 22 per cent, with a 35 per cent rise in the UK.

Sandy Crombie, Standard Life chief executive, said the company had achieved strong growth in every quarter and that it had a good platform for growth in 2007.

Standard Life demutualised last summer so Wednesday’s figures are the first in which the company’s performance as a PLC will be scrutinised. Analyst James Pearce at Cazenove described the performance as “impressive given that the company was on its knees three years ago”.

In the UK, the Self-Invested Personal Pensions (Sipps) market, in which Standard Life was an early leader, continued to perform well. Sipp assets under management rose by £3bn to £4.3bn in the year to December, with an average scheme size of £169,000 as the company targets high net worth individuals.

Group pensions sales rose 8 per cent to £437m but sales of individual pensions were down 7 per cent as customers moved over the SIPP products.

Standard Life added a note of caution over the UK market, saying that “there remains continued uncertainty around long-term market behaviour. Lapses continue at levels in excess of long-term assumptions for life with profits and pensions.”

Outside the UK, sales in Germany dropped 22 per cent as the impact of 2004 changes to pensions legislation worked their way through. In Ireland, sales rose 35 per cent, but in Canada, where the business is being refocused, sales dropped 15 per cent in the year albeit with signs of recovery in the fourth quarter.

At Standard Life Investments, its asset management arm, the company said 87 per cent of pooled pension funds outperformed the peer group. Funds under management rose more than 11 per cent to £132.1bn.

In early London trading, Standard Life’s shares were 2p lower at 302½p.

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