RLAM saw inflows of £2.53bn for the three months to 30 September, compared to £2.91bn for the same period last year, a drop of 13%. Inflows for this period were led by the group’s UK equity and fixed income credit funds. Outflows were higher at £1.98bn, compared to 1.29bn for the previous year. Overall, net inflows were £552m, down from £1.62bn in the third quarter of 2014.
Royal London’s Ascentric wrap platform saw a boost from the recent pension freedoms, with gross sales of £1.9bn at 30 September 2015 (£1.6bn on 30 September 2014). The group’s white label business also expanded through the creation of an enhanced retirement account product in conjunction with annuity provider Partnership.
Phil Loney, group chief executive of Royal London, came out strongly against proposals to make pensions more like Isas: “Creating a healthy savings habit amongst the UK public must be the ultimate goal of all who really care about preserving decent living standards in later life. This is the rationale for Royal London’s strong opposition to the proposal that income saved into pensions should be taxed like an ISA.
“Nobody should be asked to save for 30+ years without absolute certainty that savings made from their income will not be taxed twice. The public will not trust future cash strapped governments to honour any current promise of a tax free ISA style income in retirement. We urge the Treasury to focus its review of Pension Tax Incentives on reforming the current “ up front ” tax relief system to make it simpler to understand and fairer for all, considering proposals such as a single rate of tax relief on a “ 2 for 1 “ basis.”
Loney said that pension freedoms are creating new trends in the market: “Clearly a lot more advisers are recommending income drawdown for their clients and we have seen advisers choosing to transfer their clients into our flexible personal pension arrangement in anticipation of exercising freedoms at some point in the future.”
The group also said that its profit share agreement on its pension products had proved popular. From 2016 all eligible Royal London pension customers, whether they enrolled through the workplace, a personal pension or a drawdown arrangement will share in the profits of Royal London, over and above the investment return on their pension fund.
