Announced by chief executive, UK & Europe, Jackie Hunt at a discussion about the company’s half year results, the two year development will see investments made into Pru ISAs, flexible draw-down products, and an online platform solution.
Discussing the possibility of moving into platforms, Hunt said the company was attempting to “broaden [its] digital capabilities” because it currently has “almost no way in which customers can interact with us on a digital basis”.
“If you look at money, it is moving onto platforms; it is where customers want to deal with us, it is the way in which our advisers want to deal with us,” she said.
However, she added Prudential did not need to own a platform itself, but instead needed to offer technology and products that can work on a variety of solutions.
'Far more attractive'
She said that, while the Budget changes have undeniably made ISAs a “far more attractive” option, they have not completely removed the demand for annuities, as many people will still require longevity protection later on in their lives.
“It is really looking at the opportunity the Budget has given us, and we think, actually, the underlying direction of travel is very positive for the UK business because we think releasing the need on the compulsory annuitisation will encourage people to save more, and I think that creates opportunities for us and it is broad-based in its nature,” she added.
Her comments came after the company released its half-year results last week, which saw strong results across the board despite the annuity sales drop, with UK life operating profits increasing by a tenth to reach £374m.
It also saw nearly 60% growth in offshore bond sales.
This year’s Budget, delivered in March by chancellor George Osborne, introduced plans to remove the requirement for retirees to purchase an income stream, whether that be through an annuity or phased drawdown.
Under the plans, which will come into force on 6 April next year, someone reaching the age of 55 can potentially take out their entire pension pot with 25% tax free and the rest taxed at the retiree's marginal rate (subject to the person's lifetime allowance).
