Aegon UK’s platform assets have reached £7.4 billion, around double the level reached this time last year.
However, the the Aegon UK chief executive has warned that the new lifetime ISA risks derailing pension saving progress.
Total platform assets were £7.4 billion, up from the £3.8 billion reached in the first quarter of 2015 and up from the £6.4 billion reached in the fourth quarter of 2015.
Net inflows on to platform has risen from £968 million for the first there months of 2015 to over £1 billion for the first quarter of 2016.
Aegon UK contributed underlying earnings to Aegon’s European busienss of €23 million (£18 million) over the first three months of 2016, up from £2 million.
Life earnings increased to £17 million, primarily the result of a higher contribution from the protection business which saw sales grow 18%.
However, Aegon said as of the second quarter of 2016, quarterly UK earnings from life will lose approximately £5.5 million of earnings due to the sale of two thirds of the Aegon UK annuity business to Rothesay Life.
In April, Aegon announced the sale of two thirds of its UK annuity portfolio, worth around £6 billion, to Rothesay Life.
This transaction is the first step by Aegon UK towards fully divesting itself of its UK annuity portfolio, no longer strategically core to Aegon.
Aegon UK aims to focus on its platform and it also recently announced the acquisition of BlackRock’s defined contribution (DC) pension and administration platform business.
Aegon UK is also readying itself for more change to the pensions and savings landscape in the form of the lifetime ISA, announced by the chancellor George Osborne in his March Budget speech.
Aegon UK chief executive Adrian Grace (pictured) warned the lifetime ISA would pose a ‘risk’ to UK savings if left to compete against pensions.
He said: ‘Government initiatives will continue, with its latest, the lifetime ISA, likely to prove popular in some segments of the savings market. But it also presents risks if poorly positioned as a competitor to workplace pensions, encouraging individuals to opt out and lose valuable employer contributions.
‘Muddying the waters between retirement and other forms of savings could reverse achievements in recent years, so we need to be able to explain the merits of each and distinctions between the two, with platforms ideally positioned to facilitate a cross-savings view. Pensions with the addition of employer contributions and tax relief will come out on top if individuals are looking towards retirement saving.’
Source: New Model Adviser