There was a steady growth in individual pension saving and an "encouraging" increase in employer-sponsored stakeholder pensions in the fourth quarter of 2005, according to the Association of British Insurers (ABI).
The ABI’s latest figures for long-term life and pensions new business reveal total new business in quarter four of 2005 was £3.1bn Annual Premium Equivalent (APE), a rise of 16% on the equivalent quarter in 2004.
Over the whole of 2005 total new business was £11.6bn APE, an increase of 13% on the £10.2bn figure in 2004.
The research also reveals single premium individual pensions new business rose from £3.1bn to £3.8bn in quarter four 2005, an increase of 22% on the equivalent in 2004, while regular premium individual pensions new business was £68m in quarter four 2005 compared with £79m in quarter four 2004.
Regular premium employer-sponsored stakeholder pensions new business rose by 24% from £388m in 2004 to £483m in 2005, and single premium rose by 22% from £323m to £393m.
Chris Kenny, the ABI’s director of life and pensions, states: “The ABI’s figures show continued steady growth in the long-term savings market, with particularly encouraging results in the single premium individual pensions category. But there is certainly no room for complacency, as illustrated by the fall in regular premium individual personal pensions.”
Kenny says the increase in both regular and single premium employer-sponsored stakeholder pensions is especially significant in the context of the current debate and pension reform because such growth shows individuals and their employers are willing to contribute to pensions schemes through the workplace.
He adds: “The ABI’s new model for pension saving, ‘Partnership Pensions’, is designed to build on this infrastructure to encourage people to save, rather than put new, risky structures in place. Opposition to employer contributions is misplaced – clearly many employers are willing to help fund pensions for their employees.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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