Life and pensions new business has reached record levels, driven by further strong growth in the individual pensions market, according to the Association of British Insurers.
In the second quarter of 2006, overall new business was GBP3.9billion, with individual pensions up 36% to GBP1.4 billion from Q1 2006. Sales of both regular and single premium individual pensions increased significantly, and annuities also hit a record level of nearly GBP2.3 billion, an increase of 32.3% on Q1 2006.
Chris Kenny, the ABI’s director of life and pensions, said: We are beginning to see more clearly the positive effects that tax simplification has had since A-Day.
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.