Phoenix Group has set aside £70mn in the event it has to introduce further charging caps on closed book products on the back on the incoming consumer duty rules.
In its results, published this morning (March 22), Phoenix Group said it was on track for the effective date for consumer duty on back-book products in July.
To deal with this, it has set aside £70mn of Solvency II capital "to reflect the impact of the possibility of introducing further charging caps on certain products".
The firm said: "Our ongoing focus on ensuring good outcomes for Heritage customers means we have identified only a small number of products that we believe need addressing in advance of the compliance date."
It added: "We have an ongoing programme of initiatives to review our products and services and over the past seven years, we have invested significantly in focusing on good customer treatments and outcomes across our businesses.
"During that time, we have set aside over £200mn on reducing charges and we are making planned investment to migrate customers to more modern technology."
Elsewhere in the results, the firm reported £2bn total cash generation in 2023.
This exceeded its updated target of £1.8bn for the year and includes a £400mn benefit from the Part VII transfer of Standard Life and Phoenix Life as announced in November.
Phoenix Group CEO, Andy Briggs, pointed out that, as a result of this, the group has achieved its 2025 growth target two years early with £1.5bn of new business cash delivered by the Standard Life business.
Briggs added: “Phoenix’s vision is to be the UK’s leading retirement savings and income business, and we are making great progress in delivering our strategy to achieve this, as our strong 2023 financial results demonstrate.”
Profit
The results also reported that its operating profit before tax increased year on year by 13 per cent to £617mn.
This was driven by growth in the group’s pension and savings business, which increased 27 per cent on a yearly basis, increasing from £150mn in 2022 to £190mn in 2023.
Additionally, new business net fund flows increased to £6.7bn in 2023, an increase of 72 per cent when compared to the £3.9bn recorded in 2022.
The group attributed this rise to strong workplace flows.
Speaking on the role of Standard Life in the results, the company’s CEO, Andy Curran, said: “Standard Life made an important contribution to the group’s 2023 results in large part due to a fantastic year for our workplace and BPA businesses.
“As a result, we have achieved our £1.5bn new business long-term cash target ahead of schedule and delivered £6.7bn of new business net fund flows.
“Today people face a wider range of challenges when it comes to preparing for retirement and these range from longer lives, an increasing onus on the individual to save enough and then make decisions about how to make that money last.”
Looking ahead, the group stated it intends to build the "remaining capabilities required to deliver a full-service customer proposition".
