Uncertainty with public sector pensions and changes to pension tax legislation have helped a Birmingham-based mutual to increase sales in the first quarter.
Wesleyan Assurance Society has seen a 14 per cent increase in new business sales, to £10 million, in the year to March 31, after being aided by uncertainty surrounding public sector cuts.
The mutual a financial services specialist for doctors, dentists, teachers and lawyers, saw a spike in interest around the Budget in March, as changes to pension tax legislation were brought in.
Chief executive Craig Errington told the Post that the Wesleyan was fielding a rising tide of calls from professional services staff seeking a safe haven for their money.
He said: “What it is actually doing is creating an environment of significant uncertainty. When our professional clients are faced with that situation they will, like most people, choose to be slightly more conservative about how they manage their money and part of that is seeking advice about how to manage their money.
“We did see a spike in April, just before the tax cut-off and then around Budget time as people were concerned there would be further changes to limit either contributions to pensions or a reduction to the lifetime limit that people can pay into pensions.”
Mr Errington was speaking ahead of the Wesleyan’s AGM on May 3 at which the firm revealed a 34 per cent increase in pension product sales and a 26 per cent increase in life and savings product sales.
It has posted rising sales for the last seven years, including a 21 per cent increase in the 2011 calendar year which saw £42.5 million worth of new business sales.
The rise meant the mutual took on an additional 130 members of staff last year, largely in Birmingham. It now employs nearly 1,100 people, which represents the most since it was restructured in 2005 to concentrate on key professional groups.
It has total assets of £4.8 billion.
Mr Errington said financial uncertainty, culminating in a second recession in four years, was causing problems for the wider marketplace.
He said: “We will hear lots of different views in terms of the economy and whether it is starting to turn around. One month there will be positive news and the next it will be negative.
“That creates a lot of volatility in equity markets because they don’t like that.
“If we can get a period of stability there is a chance we can build confidence and move forward. I expect the economy to improve over the course of the next two years, but it could be very bumpy along the way.”
The Wesleyan’s chairman Bryan Jackson CBE, told the AGM: “There has never been a greater need for a specialist financial service like ours as our customers are facing major changes in their profession from the review of public sector pensions through to legislation like the Legal Services Act and the Health and Social Care Bill.
‘‘I’m confident that we still have plenty of opportunity to grow our business within the professional markets we serve.”