STANDARD Life-owner Phoenix Group has underlined plans to invest in the Edinburgh-based pensions and long term savings business, which it sees as a key driver of growth.
Phoenix said it has already reaped significant rewards for the decisions it made to buy the business and associated brand from the former Standard Life Aberdeen, which opted to focus on asset management under the abrdn name.
abrdn recently decided to make a £1.5bn bet on the investment platforms market through the acquisition of Interactive Investor.
Phoenix reckons there is plenty of potential in the pensions and long term savings markets against the backdrop of favourable demographic trends in the UK. The country has an ageing population and people are being required to take increasing responsibility to save for retirement along with enjoying greater freedom to choose how to do so.
After focusing previously on buying up closed pension books, Phoenix has gained a big position in the so-called open market through the acquisition of Standard Life, which employs around 2,800 people in Edinburgh.
The head of its Open business, Andy Curran, underlined the scale of the opportunities the group sees in the market and his confidence that Standard Life will help it capitalise on them.
He noted: “For me there is a sense that the company and the brand has been reborn.
“We relaunched the brand at the beginning of quarter four last year and the reception received from the market was very positive indeed.”
Mr Curran added: “We will continue to invest in Standard Life, the Standard Life brand and Standard Life in Edinburgh. As a growing and thriving business we would hope to be creating more interesting and dynamic jobs for people who live in an around the Edinburgh area or Scotland as a whole.”
Phoenix group has around 13 million customers currently, including four million who are on Standard Life’s books. Mr Curran said the group reckoned it could grow customer numbers significantly by winning business from people who are at various stages on the journey to retirement, either directly or as members of workplace schemes.
This will involve developing new products and using digital technologies to help to market and deliver them as effectively as possible.
“If we can deliver a really good customer experience through the various channels … and we have very strong market propositions to support them inevitably we would imagine people would consolidate to Standard Life rather than away from Standard Life,” said Mr Curran.
In the group’s annual results announcement chief executive Andy Briggs highlighted the scale of the impact of the Standard Life acquisition. This helped the Open Business more than make up for the natural decline in Phoenix’s closed book business last year.
“2021 marked a pivotal moment for Phoenix, with £1.2 billion of new business from our Open business more than offsetting the run-off of our Heritage business for the first time,” said Mr Briggs.
By way of example, Phoenix, which has headquarters in London, noted the success that Standard Life has achieved in the workplace pension market. This is growing in size as a result of the introduction of the requirement for employers to enrol staff automatically in pension schemes.
The group said “Momentum has been building in our Workplace business with a number of new scheme wins during 2021 providing a platform for growth.” It added: “This is due to the investment and propositions we are making in the Standard Life brand. “
Phoenix acquired the Standard Life pension business for £3.2bn in 2018. It took over the related brand in May.