Phoenix Group, the long-term savings company, has raised its earnings forecast after annual adjusted operating profit rose 31% to £825m (FY 2023: £629m).

This was driven by growth in both Pensions and Savings (£316m) (FY 2023: £190m) and Retirement Solutions (£474m) (FY 2023: £378m).

There was a loss after tax of £1.1 billion (FY 2023: £84m profit), primarily due to £1.3bn of “adverse economic variances” as well as £520m of non-operating expenses, including planned investment. 

The group is now targeting c.£1.1bn of IFRS adjusted operating profit in 2026, up from a previous target of £900m.

Phoenix Group CEO, Andy Briggs said: “We made good progress in 2024 executing our three-year strategy, delivering sustainable and profitable growth in both our Pensions and Savings and Retirement Solutions businesses. This has supported strong 2024 financial performance across our key metrics of cash, capital and earnings.

“We are ahead of plan from both a strategic and financial perspective, delivering Operating Cash Generation of £1.4bn two years ahead of our 2026 target.

“We continue to operate in the top half of our Shareholder Capital Coverage Ratio range and our strong cash generation has enabled us to repay debt whilst also investing in our business.”

Standard Life boss points to ‘retirement crisis‘

The Standard Life division saw new premiums rall to £5.1 billion from £6.2bn but it maintained its top-3 market position with 13% growth in Workplace net fund flows of £5.3bn (FY 2023: £4.7bn) taking Workplace AUA to £66.5bn.

It has built a 12% market share of the individual annuity market having re-entered the market in 2023; with £1.0bn individual annuity premiums written in 2024 (FY2023: £0.6bn).

Andy Curran, chief executive at Standard Life, said: “Our business continues to perform strongly across all metrics as we support customers with the ongoing shift in responsibility for their own retirement savings and income.

“We’ve delivered profitable growth, in both our Standard Life Pensions & Savings and Retirement Solutions businesses with IFRS operating profit up 66% and 25% respectively, while introducing new products and services to widen the appeal of Standard Life to both existing and new customers, as they navigate the journey to retirement and beyond.

“While these numbers point to strong growth, we are acutely aware that the UK is facing into a retirement crisis.

With only 1 in 7 UK adults saving enough for retirement and only 10% receiving financial advice, we continue to focus on engaging regulators and government to bring about change so people can save more when in work, but also secure better incomes when in retirement.”

Phoenix board is recommending a 2.6% increase in the final 2024 dividend to 27.35p per share, making a total dividend 54p per share.