UK operating profit rose to £350m for the year compared to £330m in 2013, as Standard Life benefited from assets under administration 7% higher at £128bn, boosted by its corporate pensions business.
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.
Standard Life Investments saw total assets under management (AUM) increase by 45% to £245.9bn during last year, up from £170.1bn, though this reflects the completion of Standard Life’s acquisition of Ignis.
Standard Life’s wrap platform continued to attract advisers and assets, with assets under administration up 26% to almost £21bn. The insurer said it is already fully compliant with upcoming regulatory changes, including removal of fund rebates, ahead of the 2016 deadline.
Pre-tax operating profits across the whole group – which exclude the cost of doing business – rose by nearly a fifth to £604m compared to £506m the year before, including second half-year profits from Standard Life’s purchase of Ignis.
Revenue was £1.4bn, higher than the £1.2bn reported in 2013.