Lloyds Banking Group said it now has £108bn of assets under management in its workplace pensions business
Lloyds Banking Group (LBG) has posted its 2024 results – revealing a 16% rise in underlying profit in its insurance, pensions and investments (IP&I) division.
The bank – which owns Scottish Widows – said underlying profit across the division rose from £190m in the year to 31 December 2023 to £220m at the end of last year after its agreed sale of its £6bn in-force bulk annuity portfolio to Rothesay.
It said the division's revenue rose from £1.08bn to £1.16bn during the year – noting that life and pensions sales were up 5% driven by strong performance in the individual annuities and workplace business.
It said it now has open book assets under administration (AUA) of £185bn, up 13% from £164bn at the end of 2023. It said net AUA flows were £5.3bn – including a "significant contribution" from its £108bn AUA workplace pensions business, where it had seen a 9% increase in regular contributions to pensions administered.
Lloyds said climate-aware investments across the division increased by £4.2bn in 2024 – bringing overall investment to £25.9bn, exceeding its target of £20bn to £25bn by the end of 2025.
Lloyds noted it had also completed the transfer of its longstanding life and pensions business to the division's strategic platform with four migrations successfully executed during 2024.
And it said that Scottish Widows now has more than one million digitally registered customers – adding it had recently relaunched an app for workplace pension customers which now has over 400,000 users, 60% of which are active users.
Commenting on the results, LBG group chief executive Charlie Nunn said: "In IP&I we are unlocking the potential of the bancassurance model to deliver innovative digital solutions and expanded propositions."
Nunn said that going forward, the bank's IP&I division was aiming to scale its "digital waterfront" to over 1.5 million customers by 2026, whilst improving group connectivity to drive growth in high-value areas, such as growing workplace AUA.
Chira Barua, chief executive of Scottish Widows and Lloyds' IP&I business, said: "2024 was a year of innovation and growth for Scottish Widows.
"We're harnessing the power of the broader Lloyds Banking Group, the UK's only integrated financial services provider, to deliver great experience, products and services for our customers and the advisers who help them navigate their financial futures.
"We've delivered top three positions in workplace and individual annuities with robust plans to grow our intermediary wealth and protection market share. Underlying profit is up 16% as we make rapid progress on our ambitious transformation program."
Lloyds' pension schemes
LBG's results also revealed the bank had seen a fall of around 17% in its defined benefit (DB) pension scheme surpluses.
The bank sponsors some of the UK's largest pension schemes – including the Lloyds Bank Pension Scheme No. 1, the Lloyds Bank Pension Scheme No. 2 and the HBOS Final Salary Pension Scheme – with combined pension assets totalling some £30.1bn at 31 December last year.
LBG said it had seen its net surplus position fall from £3.5bn at the end of 2023 to £2.9bn at the end of last year – a fall it attributed to negative market impacts, with scheme assets falling from £33.7bn at 31 December 2023 to £30.1bn at the end of last year, while liabilities fell more slowly, from £30.2bn to £27.1bn, over the same period.
It said that, following completion of the triennial valuation of its main DB pension schemes as at 31 December 2022, there would be no further deficit contributions for the current triennial period (to 31 December 2025). It said, however, it would continue to pay contributions to meet the cost of benefits accruing over the year, and to cover the expenses of running the schemes – an amount it expects to be at least £100m in 2025.
Lloyds also said it is carrying out a review of scheme amendments with regards to the Virgin Media case to decide whether any subsequent actions or amendments to IAS 19 liabilities are required.
It said it has not currently made any allowance for the possible impact of the ruling as it is currently unclear whether any additional liabilities might arise, and if they were to arise, how they would be measured, but said it would "continue to monitor developments".
