Stephen McGee – CEO of Scottish Friendly

The acquisition consists of a block of unit-linked Section 32 pensions business comprising £2.16 billion assets under management (AUM) across 76 originating schemes and covering around 40,000 policyholders, and an in-payment annuities book with £6.6 million liabilities and approximately 1,000 annuitants as at 31 December 2024.

The deal will see Scottish Friendly’s assets under management increase by £2.16bn to over £6.3bn. Under its terms, members of the Section 32 business will remain part of FutureWise, Fidelity International’s default investment strategy for UK-based workplace pension schemes, for the next 20 years.

Subject to regulatory approval, the acquisition, and transfer of customers to Scottish Friendly, is expected to complete by the end of September 2026. Under the terms, members of the Section 32 business will remain invested in FutureWise, Fidelity International’s default investment strategy for UK-based workplace pension schemes, for the next 20 years.

Scottish Friendly has a long and well-established history of acquiring large books of insurance business, the largest of which was in 2019 with the acquisition of blocks of life and pensions business from Canada Life. Today’s announcement further strengthens the pension capability of the mutual.

Stephen McGee, chief executive of Scottish Friendly, said: “This is a significant acquisition for Scottish Friendly, growing our business and offering long-term value for our eligible members through our ProfitShare initiative.

“We are committed to helping our customers and their families achieve financial wellbeing through friendly products and customer care. For customers transferring to us, we will ensure they receive the service and support they need during this period and beyond.

“I am delighted that Fidelity International has chosen Scottish Friendly as a credible partner and has entrusted us with its customers. Winning the tender process is a significant achievement and I look forward to welcoming customers to Scottish Friendly when the deal completes.”

Stuart Warner, head of global platform solutions, Fidelity International, said: “We are committed to improving our Workplace Investing operating model, with the aim of delivering the best possible customer experience and retirement outcomes for our clients and members. The acquisition of our Section 32 pensions business by Scottish Friendly will support the delivery of this strategy.

“Scottish Friendly has significant experience in acquisitions such as these, and we look forward to working closely with them to support members through this transition. Members will remain invested in FutureWise, our leading default investment strategy, and continue to benefit from its development over years to come.”