Royal London has reported record assets under management (AUM) of £212bn, up from £199bn at the end of the previous financial year, driven by robust market conditions and a surge in pension capital. The mutual insurer's operating profit rose 13 per cent to £187m, supported by stronger contributions from its protection and workplace pension offerings.
Market resilience and pension inflows
The AUM growth was propelled by favourable market shifts and investors taking the "Iran war in their stride," according to the company. Gross inflows held steady at £22.4bn, while net inflows fell from £4.1bn to £1.8bn. The drop was attributed to last year's inflows receiving a substantial lift from securing a £4.6bn multi-asset mandate with St James's Place.
Chief executive Barry O'Dwyer said: "There have obviously been impacts in parts...but the market has proved incredibly resilient despite everything that's happening in the outside world."
Pension new business growth
Pension new business sales grew five per cent to £4.7bn, chiefly powered by the workplace pension channel. The division reported a 13 per cent jump in sales to £2.4bn, underpinned by elevated transfer volumes and new market participants. This pushed customer numbers up by 112,000, bringing the total to 2.3m.
O'Dwyer said the customer expansion reflects "people having more focus on their retirement plans and consolidating old pensions into their new workplace providers." Workplace AUM climbed 15 per cent to £43.6bn.
Protection sales and inheritance tax planning
Protection sales recorded a six per cent rise to £438m, as the group witnessed heightened activity amongst its high-net-worth clientele. Customers are choosing to address their pension arrangements ahead of the overhaul to the system in April 2027, when pensions will fall within the scope of inheritance tax (IHT).
O'Dwyer explained: "It doesn't take that much for people to be in that inheritance tax net, so a lot of these people are buying life insurance in order... to pay the tax bill when it comes."
Claims and customer payouts
Throughout the first half of the year, the group settled 98 per cent of protection claims, paying out £392m to customers. The mutual, which has a large base at Alderley Park in Cheshire, continues to strengthen its position in the UK market.
