Aegon UK reports fall in pre-tax profits

Fee revenues fell 10 per cent year-on-year to £98m at the Dutch firm, which is based at Edinburgh Park on the western outskirts of the capital and employs about 2,300 people.

The life and pensions firm attributed the lower margins to its drive to switch more customers to its online “platform” system.

Chief executive Adrian Grace said: “There is undoubtedly pressure on the revenue line. But operating expenses were down 43 per cent to £66m.”

He said the fall in costs was linked to increasing take-up for the platform, which saw its assets under administration more than double to £6.4 billion and is a “more efficient way of doing business”.

He added: “The digitisation of the back end means we can drive down costs, which is in some ways substituting for the fact that revenues are down.”

Some 44,000 new customers were added to the platform in the fourth quarter, including those “upgraded” from older products, taking the total to almost 243,000.

Addressing the issue of new rules that mean retirees are no longer forced to buy annuities with their savings, Mr Grace said that annuities “still have a place” in the market, as they provide a certainty of income not offered by some products that leave savers’ pension pots invested in stocks and shares.

He added that the review into the future of the company’s annuity portfolio was ongoing, “but there’s no smoke from the Sistine Chapel just yet”.