Record year for pensions new business in 2006

New figures from the Association of British Insurers (ABI) have revealed that 2006 was a record year for new business in the areas of life insurance and pensions.



For the first time, Annual Premium Equivalent sales, an industry benchmark of regular premiums plus one-tenth of single premiums, broke the £15 billion mark, reaching £15.46 billion.

New business in the area of regular premium individual pensions performed strongly, increasing from £2.1 billion in 2005 to £3 billion in 2006, a growth of 45 per cent.

The main driver of this growth was the pensions tax simplification scheme, which came into force on A-Day, April 6th 2006, the organisation said.

ABI deputy director general Stephen Sklaroff said: "The government's A-Day reforms have helped to stimulate growth in personal and group pensions, encouraging many more people to begin building up funds for their retirement.

"The challenge now is to get the design of the new personal accounts right. Changes will be needed if good existing pension schemes are not to be undermined."

The National Association of Pension Funds this week welcomed government plans for a new system of pensions personal accounts but said that fiscal support to encourage employers with high-value schemes to auto-enrol their staff onto schemes at current high contribution rates was needed.

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