Analysts report Standard Life in a good position
Pensions market changes help firm’s strong growth
STANDARD Life has made what analysts described as a strong start to the year helped by achieving growth in the fast-changing UK pensions market.
The Edinburgh-based giant also received a boost from investors in Europe moving funds into the UK in search of higher returns. Bond yields in some countries have turned negative after the European C ent ra l Bank launched a programme to buy bonds to help boost the Eurozone economy through quantitative easing.
Standard Life reported that total assets under administration increased by five per cent to £311.9 billion at 31 March, from £296.6bn at 1 January helped by strong inflows net of redemptions.
Chief executive David Nish highlighted the company’s success in the pensions market, in which providers have been responding to wide-ranging reforms. These include changes that gave consumers much greater freedom to decide how to fund their retirement as well as those requiring many more employers to provide pensions for staff members.
Mr Nish noted there was a record quarterly inflow of £1bn into Standard Life’s Wrap Platform, in which customers can put a range of investments. The net inflow was up 16 per cent on the first quarter last year and took assets under administration to £40bn.
The increase came ahead of the introduction this month of reforms that allowed people aged over 55 to take money out of their pension pots to fund purchases.
Standard Life dropped charges on its flexible drawdown product in March as part of its preparations for pension freedom
Annuity inflows fell £0.2bn in the first quarter.
Standard Life saw its annuity business fall by around two thirds last year, following changes announced in the 2014 Budget giving people more choice.
Standard Life enjoyed success in the workplace pensions market with regular contributions up 16 per cent year-on-year, taking assets under administration to £34bn.
A further 60,000 people joined schemes offered by employers under auto-enrolment legislation. The company has 620,000 members of such schemes on its books.
Mr Nish said: “The strength of our propositions, investment solutions and market positioning means we are well placed to deal with the new pensions regulations and to support customers as saving for their futures becomes increasingly front of mind”
The Standard Life Investments fund management operation grew assets under administration by five per cent in the quarter, to £258.4bn from £245.9bn.
Mr Nish said the business had recorded particularly strong net inflows from third parties, which totalled £3.7bn.
He said Standard Life is benefitting from expanding its distribution capabilities and strategic relation-
‘‘ We are well placed to deal with new pensions regulations and to support customers saving for their futures
ships with 73 per cent of net inflows from outside the UK.
The chief executive of Standard Life Invesments, Keith Skeoch, noted particularly strong flows from Europe amid quantitative easing on the continent.
“Standard Life continues to deliver consistently on net inflows in UK pensions and asset management,” said analysts at JP Morgan in a note, adding: “Overall we see these as a strong set of results.”
Analysts at JP Morgan Cazenove wrote that Standard Life had recorded yet another solid set of quarterly flows and was well placed to grow in the UK pensions and asset management business.
Standard Life completed the £2.2bn sale of its Canadian business to Manulife in February. It returned £1.75 bn to shareholders.