On the face of it Royal London’s 13% increase in workplace assets looks good news
Some are confused about whether without a master trust, Royal London can get to size. This is no longer a problem despite the glum look on the CEO’s face. Their GPP can be reckoned part of scale. Royal London are to scale with the first and second hurdles passed with 3 and 8 years to spare.
But the truth is that we’ve had another good year for markets (this is the S&P 500) which now compromises the most of what a GPP holds.
The UK’s FTSE 100, indeed all global equity markets have had a great year. Royal London’s assets should be up.
The insurer’s results, published today (5 August), revealed its workplace pensions business assets under management (AUM) grew to £43.6bn, up from £38bn in December 2025.
So what? So what about new members
The firm also said it welcomed 112,000 new scheme members and said these members would be eligible for ProfitShare.
The so called “growth” in Royal London’s workplace GPPs are in fact matched by an increased deferred pensioners. Royal London has a small part of the workplace market so when someone leaves a company using the Royal London GPP they are replaced by a new member.
Royal London is unique in three things (when it comes to UK Life)
- It has stuck with advisers to get new business (and look after existing business) – this is a part of a wider strategy – which I think a fair strategy.
- It has not opened a master trust and is now left with a pretty well unsellable GPP as its workplace pension. That was a bad choice but probably linked to (1)
- It has failed to get into DB risk transfer (aka bulk annuity “buy-out”). Ok it’s got in now but now the market is too competitive and it’s slowing as even small schemes (Royal London’s target) find themselves with surplus.
I have loved Royal London since its days under Phil Loney when it got its act together. I love its mutuality and the way it pay members back its profits. It is the only insurer that still takes its IGC seriously.
But I fear that continuing to do these great things, Royal London needs to move on.
For Royal London there is a need to find an alternative to the past or it will be over taken by the future. Their highlights aren’t high enough.
