Royal London pension sales drop due to lockdown measures

Overall new life and pensions business fell to £8.5bn at the end of 2020 compared to £10.6bn a year ago

Life and pension sales at mutual Royal London fell 20 per cent last year amid nationwide lockdowns measures.

Annual 2020 results published today show how tough the past year has been for the firm.

They say economic uncertainty, stock market volatility and the national lockdowns caused disruption to the services provided by intermediaries to their clients.

Overall new life and pensions business fell to £8.5bn as at 31 December 2020 compared to £10.6bn as at 31 December 2019.

This is on a present value of new business premiums basis, which is the total of new single premium sales received in the year plus the discounted value, at the point of sale.

Broken down, individual pensions new business sales dropped 25 per cent to £4.7bn compared to £6.3bn in 2019.

The decline was mainly due to individuals delaying the decision to consolidate their pension holdings and advisers having to adapt their business models early during the pandemic.

Workplace pensions new business sales also fell 21 per cent to £2.4bn from £3.1bn as companies deferred decisions to move scheme providers.

Also, there were lower new entrants to existing schemes as fewer people moved employer.

Group operating profit before tax for the year ended 31 December 2020 was lower at £41m from £165m in 2019.

Assets under management (AUM) grew to £148.4bn from £138.9bn driven by net inflows of £3.9bn, the inclusion of £700m of AUM from Police Mutual, and £4.9bn of positive market movements.

Looking ahead Royal London says it has a robust capital position that provides the “flexibility to pursue growth opportunities” and to continue to “invest in digital innovation” and technology.

It completed the sale of the Ascentric platform to M&G last September and also bought fintech firm Wealth Wizards from LV= this week. The deal is subject to regulatory approval and will be used for Royal London’s workplace pensions offering through auto-enrolment.

Commenting on the results today on Radio 4, Royal London group chief executive Barry O’Dwyer said: Lockdown has really impacted adviser productivity, particularly during the first lockdown and stopped many from consolidating their pensions. Demand has proved resilient for people who have pensions already. That has been great for people who have access to financial advice and are taking full advantage of it.