Individual pensions reach record levels according to ABI stats

In the second quarter of 2006, overall new business was £3.9bn APE. Individual pensions performed strongly, with £1.4bn APE new business, up 36% on Q1 2006.

Total regular premium new business in Q2 2006 was £1.730bn, an increase of 23.3% on Q2 2005. Total Single Premium new business was £21.795bn, an increase of 40.0% on Q2 2005.

Total Single Premium individual pensions new business in Q2 2006 was £4.197bn, up 59.5% on Q2 2005. Total Regular Premium individual pensions new business in Q2 2006 was £953m, up 67.2% on Q2 2005.

Pension Annuity sales were £2.255bn in Q2 2006, up 32.3% from £1.705bn in Q1 2006 and up 7.0% from £2.108bn in Q2 2005.

Chris Kenny, director of life and pensions at the ABI, said: “It is encouraging to see continued growth in the life and pensions sector. We are beginning to see more clearly the positive effects that tax simplification has had since A-Day. The new rules have had a particularly beneficial effect on annuities, as people can now buy capital protected and short-term policies, which give greater choice and peace of mind. The challenge for the industry now is to ensure that this growth is sustained over time. In particular, we must avoid the possibility of current pension reform proposals creating savings inertia because Personal Accounts are not due to begin until 2012 at the earliest.”