Legal & General has passed the GBP1 billion milestone for new business this year driven by strong demand for savings products.

The UK’s third biggest life insurer said that 2005 has been a record year for new business, with a 29% increase globally to GBP1.3 billion. Chief executive Tim Breedon said that strength in the IFA markets and good growth in our banking and building society channel form the core of our winning proposition. Mr Breedon added that it is in a good position for further growth in the UK market.

Unit-linked bond sales increased by nearly 50%, with sales in single payment unit trusts increasing by 142%. Improving equity markets and a recovery in consumer confidence helped boost sales in saving and investment products, Legal & General said.

Going forward, the group expects the investment, savings and protection market to continue to grow in 2006. The group is also expecting an upturn in the housing market and changes in pension rules on A-Day April 6 2006 will boost volumes of pension transfer business.