Royal London’s chief executive today defended investment in defence and armaments by the pensions industry after posting an 11% rise in operating profit.

In an interview, chief executive Barry O’Dwyer did not comment directly on claims made today that the sector’s big players, including Royal London, is “boycotting” arms firms.

It comes as group of Labour MPs have called for banks and fund managers to stop defining defence as unethical.

Mr O’Dwyer, commenting after posting annual figures, said: “Some customers take an ethical stance that they do not want to invest in armaments and that is perfectly fine. They are entitled to do that. It is their money.

“We offer some funds that offer those sorts of investments, but the majority of our funds don’t have those exclusions. This is all for me about customer choice.

“There are many different definitions of ethical investment and customers can choose a fund that meets their particular definition.”

Royal London has a significant presence in Edinburgh and owns a number of brands including Scottish Life and Scottish Provident.

It reported an 11% increase in operating profit to £277m in 2024 and Mr O’Dwyer said: “The UK economy is proving relatively robust when it comes to pensions savings.”

It will distribute £181m to 2.3 million customers in April. Last year Royal London entered the bulk purchase annuity market, giving trustees the option of choosing the only customer-owned provider in this market.

Gross inflows rose to £31.8bn (2023: £29.9bn). Net outflows of £1.0bn (2023: £4.2bn net inflows) were impacted by £4.3bn of external net outflows from Global Equities strategies following the departure of some members of the Global Equities team.

Assets under management increased to a record £173bn (31 December 2023: £162bn).