Aegon assets hit £4bn as inflows triple

Edinburgh-based life and pensions firm Aegon UK has delivered a jump in first quarter profits driven by an upturn in demand for its online retirement planning service.

Underlying pre-tax earnings at the Dutch-owned firm rose 27 per cent to £28 million in the first quarter, while operating expenses fell 18 per cent to £64m.

Aegon has seen net inflows on its platform triple for the first three months of the year to £968m, while Inflows reached £305m in March 2014.

Assets under administration stand as £3.8bn as at 31 March, compared to £1.6bn from the same time last year.

Aegon, which employs about 2,200 people in the Capital, says there are now 100,000 investors using its platform, with 20,000 new customers added in Q1.

Overall, Aegon posted underlying earnings of £28m, up 27 per cent on the £22m reported in 2014.

The life business saw earnings drop from £18m to £15m, which Aegon says is due to its derisking process ahead of Solvency II.

However, the firm says that it is braced for a hit to its legacy pensions book in the wake of pension freedoms and is planning to launch a guaranteed pension drawdown product in Q2.

The changes introduced last month now allow those aged over 55 to take their entire pension pot as a cash lump sum.

Aegon UK chief executive Adrian Grace said: “In a period of unprecedented reform in the industry, we’ve focused our energy on embracing change to build a stronger business that addresses the needs of our advisers, employers, employees and our customers.

“Our strategy and determination to meet the rapid pace of change has meant we’ve delivered an increase in underlying earnings to £28 million up 27% against the same period a year ago.”

The firm has seen a surge in customer queries, with its call centre handling 40 per cent more calls than a year ago.

Mr Grace added: “We said we would grow this year and £1bn in the first quarter puts us in the premier league. We’re particularly pleased about the growth of our non-advised Retiready solution. Only 11 per cent of people do their pensions online, whereas in general insurance it’s 70 per cent, and 85 per cent for banking. Online pensions are the way to go and there’s clearly customer demand.”

The company’s pension earnings climbed from £5m to £14m, which the company attributes to lower expenses and positive market movements.