Royal London benefits from pay growth delivering boost to pensions
The company, which offers life insurance, pensions and retirement planning, said it would be distributing £181 million to eligible customers.
Millions of Royal London customers will share payouts totalling £181 million after the investment group grew its yearly profit and saw wage rises boost pension savings.
The company, which offers life insurance, pensions and retirement planning, said 2.3 million customers would benefit from the payout.
Royal London has a mutual structure – meaning it is owned by individual customers rather than shareholders and investors.
This means it will distribute £181 million to eligible customers who have pensions and life policies with the group in April – marking an increase from the £163 million shared out last year.
The higher amount comes off the back of the group reporting higher earnings for the year, with an operating pre-tax profit of £277 million, up about a 10th from 2023.
The number of workplace pensions transferring to Royal London soared 39% year-on-year, while it also added nearly 1,000 new employer workplace schemes, with firms “very often moving from a shareholder-owned competitor”.
Employees receiving pay rises and a relatively high employment rate helped grow the UK pension market last year, Royal London said.
However, it also highlighted an increase in customers withdrawing money from pension pots as a result of ongoing cost-of-living pressures for many households.
Furthermore, speculation in the lead-up to October’s autumn Budget statement about potential changes to access to tax-free cash through pensions contributed to higher levels of withdrawals among concerned consumers.