REG - Royal London RL Fin Bnds No.6 PLC RL Fin Bnds No.4 PLC RL Fin Bnds No.3 plc RL Fin Bnds No.2 PLC - Financial results 2025
06/03/2026 08:15
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RNS Number : 5825V Royal London 06 March 2026
Results Announcement 2025
6 March 2026
Royal London to share £199m with eligible customers
Barry O'Dwyer, Group Chief Executive Officer, commented:
"We recorded another strong performance in 2025 with operating profit a
(#_edn1) () up 18%, reflecting the positive momentum across our business.
This was supported by our first full year in the bulk purchase annuities
market, where we secured a series of key transactions as trustees and advisers
valued the stability and long-term commitment that a mutual can offer.
"Workplace Pensions are core to our business, providing 2.2 million customers
with access to our flagship Governed Range investment portfolios. Our
continued success and long-term focus as a mutual on customers are enabling us
to invest £100m over the next three years to enhance our Workplace Pensions
offer, allowing us to support an increasing number of employees with their
retirement savings.
"We're owned by our customers and, when we do well, they share in our success.
In April, we will share £199m with eligible customers through ProfitShare,
bringing the total shared since 2007 to over £2bn - a tangible demonstration
of mutuality in action.
"We continue to focus on helping customers to make informed choices to build
lasting financial resilience. In 2025, we saw an increasing number of advisers
choosing Royal London to meet customers' protection needs and we broadened our
savings offering for our Individual and Workplace Pensions customers with the
launch of our new Stocks and Shares ISA, which, like our pensions, qualifies
for ProfitShare."
Highlights
* Our flagship Governed Range, where most of our pensions customers are
invested, attracted net inflows of £2.6bn (2024: £3.2bn), with assets under
management (AUM) reaching £83bn (2024: £72bn).
* Launched a Stocks and Shares ISA, expanding our investment offering and
providing Individual and Workplace Pensions customers with greater choice for
their medium to long-term savings.
* Protection new business sales rose 17% to £991m (2024: £846m), driven by
enhancements to our proposition and increasing market share in a buoyant
market.
* Customer satisfaction(5) continues to rise, with 44% of customers rating Royal
London 9 or 10 out of 10, up 12 points since the measure was introduced in
2020, and 70% now rate us 7 or higher.
* Our Bulk Purchase Annuity (BPA) buy-in business performed particularly
strongly in our first full year of trading, with 18 completed transactions and
£1.3bn of premiums.
* Expanded our Private Asset capabilities both through new fund launches and the
acquisition of Dalmore Capital, extending the ability for Governed Range
customers to access the potential benefits of diversified returns from private
assets such as property and infrastructure.
* 80% (2024: 81%) of actively managed funds outperformed their three-year
benchmark(4) on an equally weighted basis and 51% (2024: 60%) outperformed on
an AUM-weighted basis.
* Our Irish business delivered Protection and Pensions new business sales of
£488m, up 64%.
* Contributed £3.5m towards social impact initiatives in 2025, including
extending our partnership with Turn2us, a charity working to address
financial insecurity across the UK, by another three years.
Financials
Year ended Year ended
31 December 2025 31 December 2024
Performance Group adjusted operating profit(6) £ 327 m £ 277 m
Transfer to the fund for future appropriations (FFA)(7) £167 m £ 167 m
ProfitShare(3) £199 m £ 181 m
New business Life and pensions new business sales(8) £12,200 m £ 10,804 m
Inflows/(outflows) Gross inflows(9) £42,489 m £ 31,825 m
Net inflows/(outflows)(9) £4,105 m £ (1,037) m
31 December 2025 31 December 2024
Funds Assets under management(10) £ 199 bn £ 173 bn
Capital(11) Regulatory View solvency surplus £ 2.5 bn £ 2.7 bn
(Solvency II)
Regulatory View capital cover ratio 183 % 196 %
Investor View solvency surplus £ 2.5 bn £ 2.7 bn
Investor View capital cover ratio 188 % 203 %
* Group adjusted operating profit(6) grew by 18% to £327m (2024: £277m)
supported by the strength of our Pensions business, higher Protection
contribution and a full year of trading from our BPA proposition.
* Transfer to the FFA(7) of £167m (2024: £167m) included positive economic
movements of £176m and the allocation of ProfitShare and is stated after a
£51m one-off charge to reflect the expected impact of transitioning a number
of legacy servicing arrangements from the Capita plc group over the next five
years.
* Life and pensions new business sales(8) were up 13% to £12,200m (2024:
£10,804m) with our Pensions business continuing to deliver good new business
flows and growth supported by a £1.1bn increase from BPA.
* Gross inflows(9) rose to £42.5bn (2024: £31.8bn), with net inflows(9) of
£4.1bn (2024: £1.0bn net outflows) boosted by flows into liquidity funds and
a new £4.6bn multi asset mandate with St. James's Place.
* Assets under management(10) increased to a record £199bn (31 December 2024:
£173bn) including £6bn from Dalmore Capital.
* Robust capital position supported investment in the business, with Investor
View and Regulatory View(11) ratios of 188% (31 December 2024: 203%) and 183%
(31 December 2024: 196%) after a 5% impact from the acquisition of Dalmore
Capital and a 4% capital strain from writing BPA business.
Financial results conference call
Royal London will hold a conference call to present its 2025 Financial Results
on Friday, 6 March 2026 at 08:30. Interested parties can register here
(https://events.teams.microsoft.com/event/6fd96932-441f-4b93-ae3e-d5302cfad918@e0cfe368-5773-4452-b8c6-671891a3f98a)
. A copy of the presentation to investors is available on the Group's website
(https://www.royallondon.com/about-us/our-performance/investor-relations/) .
For further information please contact:
Lora Coventry, Senior PR Strategy Manager (lora.coventry@royallondon.com /
07919 170673)
About Royal London
Royal London is the UK's largest mutual life, pensions and investment company
and in the top 30 mutuals globally b (#_edn2) . Working with advisers and
customers, we provide long-term savings, protection and asset management
products and services. Our Purpose - 'Protecting today, investing in tomorrow.
Together we are mutually responsible.' - drives us and defines the impact we
want to have.
Financial calendar:
* 6 March 2026 - Financial Results for 2025 and conference call
* 27 May 2026 - RL Finance Bonds No. 6. plc subordinated debt interest payment
date
* 2 June 2026 - Annual General Meeting
* 5 August 2026 - Interim Financial Results for 2026 and conference call
* 7 October 2026 - RL Finance Bonds No. 4 plc subordinated debt interest payment
date
* 13 November 2026 - RL Finance Bonds No. 3 plc subordinated debt interest
payment date
* 25 November 2026 - RL Finance Bonds No. 6 plc subordinated debt interest
payment date
Notes to editors
1. The information in this announcement relates to The Royal London Mutual
Insurance Society Limited ('RLMIS' or 'the Company'), and its subsidiary
undertakings, together referred to as 'Royal London' or 'the Group'.
2. The Group assesses its financial performance based on a number of measures,
some of which are not defined or specified in accordance with relevant
financial reporting frameworks such as UK GAAP or Solvency II. These measures
are known as Alternative Performance Measures (APMs). APMs are disclosed to
provide further information on the performance of the Group and should be
viewed as complementary to, rather than a substitute for, the measures
determined according to UK GAAP and Solvency II requirements. Accordingly,
these APMs may not be comparable with similarly titled measures and
disclosures by other companies.
3. ProfitShare is a discretionary enhancement to eligible RLMIS customers with
unit-linked or With-Profits policies. The allocation is considered annually
and depends on a number of factors including financial performance, capital
position, the risks and volatility of financial markets and the Group's
outlook.
4. Investment performance has been calculated for funds with a defined external
benchmark on an equally weighted basis, by measuring the number of in-scope
funds outperforming their three-year benchmark divided by the total number of
in-scope funds and, on an AUM weighted basis, by using a weighted average of
active assets under management. Benchmarks differ by fund and reflect their
mix of assets to ensure direct comparison. Passive funds are excluded from
this calculation as, whilst they have a place as part of a balanced portfolio,
they represent a minority of our AUM as Royal London believes in the long-term
value added by active management.
5. The Royal London Customer Value Statement (CVS) model tracks seven key pillars
of importance across nearly 3,000 Royal London customers twice a year:
Communicate, Membership, Resolution, Be Personal, Pay Out, Investment and
Reputation. The results are reported by each factor and through an overarching
CVS weighted index that represents the percentage of customers rating the
company 9 or 10 out of 10 overall.
6. Group adjusted operating profit is an APM and is the transfer to the fund for
future appropriations before other comprehensive income excluding: short-term
investment return variances and economic assumption changes (economic
movements); loss arising from acquisitions and other corporate transactions;
ProfitShare; ValueShare; tax; and one-off items of an unusual nature that are
not related to the underlying trading of the Group. Profits or losses arising
within the closed funds are held within the respective closed fund surplus;
therefore Group adjusted operating profit represents the result of the Royal
London Main Fund (RL Main Fund) and the RLI DAC Open Fund. In previous
periods, this metric was referred to as Group operating profit before tax and
has been renamed to make clear that it is an APM; the basis of calculation is
unchanged. All references to 'operating profit' and 'Group operating profit'
in this document represent the APM measure 'Group adjusted operating profit'.
References to 'UK', 'Asset Management' and 'Ireland' operating profit
represent the relevant Result from operating segments included in the
Segmental Information note to the Financial Statements.
7. Transfer to the fund for future appropriations represents the statutory UK
GAAP measure 'Transfer to the fund for future appropriations' in the technical
account within the Consolidated statement of comprehensive income.
8. Life and pensions new business sales is an APM and represents life and
pensions business only, excluding Asset Management, other lines of business
and Bulk Purchase Annuity buy-ins transacted with the Group's defined benefit
pension schemes. New business sales are presented as the Present Value of New
Business Premiums (PVNBP), which is the total of new single premium sales
received in the period plus the discounted value, at the point of sale, of the
regular premiums the Group expects to receive over the term of the new
contracts sold in the period. The rate used to discount the cash flows is
derived from the opening swap curve at the start of the financial period for
all new business except annuities, where the rate used is the future yield
(less an allowance for downgrade and default risk) on assets expected to back
these annuitant liabilities over the lifetime of the contract.
9. Gross and net flows incorporate flows into Royal London Asset Management
(RLAM) from external clients (Asset Management flows) and those generated from
the Group's life and pensions business. Asset Management net flows represent
external client inflows less external client outflows, including cash
mandates. Life and pensions net flows represent the combined premiums and
deposits received (net of reinsurance) less claims and redemptions paid (net
of reinsurance). Given its nature, non-linked Protection business is not
included.
10. Assets under management (AUM) is an APM and represent the total of assets
managed by, or on behalf of, the Group, including funds managed on behalf of
third parties. This includes assets where the beneficial ownership interest
resides with third parties (and which are therefore not recognised in the UK
GAAP balance sheet) but on which the Group earns fee revenue.
11. The capital cover ratio is an APM and is calculated as the Group's Own Funds,
being the regulatory capital under Solvency II, divided by the Solvency
Capital Requirement (SCR). The 'Investor View' equals the RL Main Fund capital
position (i.e. excluding ring-fenced funds). The 'Regulatory View' solvency
surplus and capital cover ratio exclude the closed funds' surplus as a
restriction to Own Funds. All capital figures are stated on a Group Partial
Internal Model basis and the 2025 figure is estimated and unaudited.
Review of the Year
Our Purpose - Protecting today, investing in tomorrow. Together we are
mutually responsible. - drives us to grow our business over the long term for
the benefit of our customers.
Since setting out our strategy in 2020 - to be an insight-led modern mutual,
growing sustainably by deepening customer relationships - we have made great
progress, growing and diversifying our business while delivering substantial
change. In 2025 we continued to build momentum and lay further foundations to
deliver for our customers.
Resilience starts with protection
The first part of our Purpose is about helping customers to protect themselves
and their families. In 2025, 98% of protection claims were paid out -
representing over 62,000 claims and a total of £821m. Following the proposed
changes to inheritance tax announced in the 2024 Budget, we evolved our
proposition to support estate planning needs, with our 'Joint Life Second
Death' term product, alongside our Whole-of-Life offering, seeing strong
demand.
Our five-star ratings at the 2025 Financial Adviser Service Awards, for both
protection and pensions, reflected our ongoing commitment to delivering
outstanding service and continuous improvement. For the 12th year in a row, we
also retained our five-star investment provider rating.
In Ireland, we retained our leading position for protection in the financial
broker market. For the third consecutive year, we awarded ValueShare - the
equivalent to ProfitShare in the UK - to eligible pension customers across
Ireland. Alongside ProfitShare, this reflects our dedication to ensuring that
eligible customers benefit from the growth and success of the business.
Broadening our solutions
Offering diversified investment solutions that support the needs of customers,
and their advisers, is critical to the relationships we build with them. For
many people in the UK, building their financial resilience involves saving as
much as they can both through the workplace pension that their employer puts
in place, and by putting money aside in an ISA. In September we launched our
new Stocks and Shares ISA, designed to help our customers to manage their
different investment products in one place. Our ISA offers tailored digital
experiences, the same investment choices as our pension products and, like our
pension, qualifies for ProfitShare.
In addition, we have introduced new functionality across our digital
platforms, including forms for ad hoc payments and live web chat for
Protection customers. Our digital services, such as our mobile app, are
central to how customers interact with their plans, reflecting our commitment
to delivering accessible and personalised services.
In May, we confirmed that Royal London was one of the first cohort of pension
providers connected to the Pensions Dashboard ecosystem. As an early adopter,
we are helping to bring forward a more transparent and accessible retirement
landscape by enabling customers to view all their pensions in one place.
Our Workplace Pensions business is our largest source of new customers. We
welcomed 230,000 new Workplace Pensions members in 2025, taking the total we
support to 2.2 million - most of whom are invested in our Governed Range,
which offers valuable diversification. We are committed to offering a
market-leading mutual solution to a growing number of employers. Over the next
three years, we will invest £100m to enhance our Workplace Pensions offering
and support an increasing number of employees with their retirement savings.
As a major workplace pensions provider, we are pleased to be a signatory to
the Mansion House Accord. This is a voluntary initiative that encourages
workplace pensions providers to increase investment in UK private assets, and
we will do so where it is in our customers' best interests. We have also
announced our backing for the Sterling 20 initiative, a UK-wide plan to drive
regional growth and investment in infrastructure.
Within our portfolios we already allocate substantial investments to UK real
estate and expect to increase our allocation to other private asset classes
over time. Our acquisition of infrastructure asset manager Dalmore Capital,
which we completed in November, supports this strategy and will help to
broaden the selection of assets being invested in the Governed Range. Dalmore
Capital specialises in infrastructure investments, primarily within the UK -
including utilities, transport and energy networks - and has strong
environmental and socially positive credentials across its portfolio.
Alongside our acquisition of Dalmore Capital, we further expanded our Asset
Management offering through the launch of three asset-backed securities funds
and our entry into the collateralised loan obligation market. Through the
launch of four new Australian unit trusts, we also continued to build our
international presence.
In October, we announced the launch of three additional funds in the
Sustainable range available to our pensions and ISA customers, taking the
total to nine and offering more choice and flexibility. In 2025, all eight of
the underlying UK-based Sustainable funds managed by our Asset Management
business adopted the 'Sustainability Focus' label, under the FCA's
Sustainability Disclosure Requirements. This is a significant milestone that
underlines our long-term track record in sustainable investing.
Our BPA offering, the only mutual option in the market, continues to support
our growth. We completed 18 buy-in transactions with external pension schemes
in the first full year since our launch into this market in September 2024,
generating £1.3bn in new business sales. This will help thousands of people
to achieve greater security in retirement.
Driving purposeful relationships
Our commitment to our Purpose helps us to establish enduring relationships
with like-minded customers and clients. To support this, we continue to invest
in ways of working that drive innovation, enabling our colleagues to deliver
good customer outcomes and help us run our business efficiently. With interest
in AI growing, giving all colleagues access to Microsoft Copilot was a key
milestone in 2025. To maintain trust, ensure transparency and protect
sensitive data, we will retain our focus on using AI ethically, safely and
with clear controls in place, alongside our efforts to ensure that colleagues
are alert to cyber risks.
Through our partnerships, we look for opportunities to drive positive change
in the world around us. These include our existing partnerships with Cancer
Research UK and Turn2us - a charity working to tackle financial insecurity in
the UK - and our new partnership with Groundwork, focused on a fairer, greener
future for people, communities and nature. Levelling the playing field for
women in sport continues to be the objective of our partnership with The
British & Irish Lions. We invest at grassroots level to empower local
rugby clubs to grow the game, create more opportunities for participation and
inspire ambitions - to support the build of a strong pipeline of talent for
future Lions Women's teams. With the team's first ever tour taking place in
2027 to New Zealand, we hope that this will serve as a tangible reminder to a
new generation of what they can achieve.
Looking ahead
As we look ahead, we are progressing our strategy to deliver even more for a
greater number of customers. We want to empower millions of people to take
better financial decisions, harnessing technology to make it engaging and
easy. Workplace Pensions are the primary savings vehicle for the majority of
UK pension savers and will play an increasingly prominent role in the future.
This is where we will have the greatest impact, and we are continuing to
invest in strengthening our proposition.
Following the changes announced in the Budgets over the last 18 months -
around inheritance tax, cash ISA contributions and salary sacrifice pension
contributions - it is likely that many people will need to reassess the ways
in which they save for the future. However, with only 9% of the UK population
paying for personal financial advice, the vast majority of customers are
navigating complex financial decisions on their own. Our modelling suggests
that 'Targeted Support' could benefit 21.5 million people in the UK through
the actionable advice it provides. In 2026, we will launch our Targeted
Support offering, designed to complement our continued commitment to offering
advisers the support and tools they need to deliver positive outcomes to their
clients.
The importance we place on environmental, social and governance (ESG)
principles is evident in our climate commitments, and our approach to
responsible investment and stewardship. We remain committed to reducing
emissions from our investment portfolio and operations, and our Climate
Transition Plan, published in June, outlines our progress and the actions we
are taking.
By continuing to champion the value of mutuality, it will help us sustain a
culture that supports colleagues to thrive and grow, and that positions us
well to achieve our Purpose. We will continue putting our customers first,
while playing our part in creating an environment and society that they can
look forward to retiring into.
UK
Market overview
The pensions market continued to grow in 2025 supported by resilient levels of
employment and saving through workplace pensions. The industry continues to
see increasing levels of pension consolidation as more customers bring their
pension savings together when changing employer or approaching retirement.
With many working age people not on track for an adequate level of retirement
income, the overall rate of saving remains an industry concern. Fiscal
uncertainty, particularly in the run-up to the Autumn Budget, has also meant
that more customers have accessed their pension savings early.
The individual protection market grew strongly through a rebound in mortgage
lending and increased demand for propositions supporting customers impacted by
proposed changes to inheritance tax. These changes have increased demand for
our whole-of-life products as advisers continue to support customers' estate
planning needs.
The advice gap remains a challenge, with cost, accessibility, and awareness
continuing to limit access to financial advice. In response, the FCA has
finalised its framework governing the provision of a new regulated form of
advice called Targeted Support, designed to help more consumers make informed
financial decisions. These proposals represent a significant opportunity to
give advice to millions more people who do not want to, or are unable to, pay
for individual advice. Consumer Duty remained a central focus. While advisers
continue to welcome its principles more broadly, the increased regulatory
burden has led some firms to reduce their client base to ensure they maintain
service quality and compliance with the standards.
Business performance
Our Workplace and Individual Pensions business maintained sales levels
year-on-year. We delivered significant sales increases and market share growth
in Protection and also in our BPA business in its first full year of trading.
This new business growth supported an increase in UK operating profit to
£425m (2024: £368m), demonstrating our increasingly diversified business
model.
Continued investment in digital services improved experiences for our
customers and advisers, with the number of customers logging into our mobile
app at least once in the last 12 months increasing from 393,000 to 505,000.
Our Retirement Planner service won Best Retirement Initiative at the 2025
Professional Adviser Awards, and our work to automate manual customer
processes is helping to deliver better customer outcomes within our servicing
teams. As more individuals are taking an active role in managing their
savings, these improvements helped to deliver an 8% increase in the number of
workplace pensions transferring to Royal London in 2025.
Supporting customers to understand their savings, income and protection
options remains a key focus. We enhanced our mobile app to give customers a
simpler, more personalised customer experience, with clearer content and new
visual and audio guides. We also expanded our Workplace customer engagement
programmes to support employees who are joining their employer's pension
scheme, considering transferring a pension, or preparing for retirement.
We measure the impact our service enhancements have on customer satisfaction
through our Customer Value Statement (CVS) score, across seven aspects that
are important to customers (Communicate, Membership, Resolution, Be Personal,
Pay Out, Investment and Reputation). Since 2020, when the measure was
introduced, we have seen a 12 percentage point rise, to 44%, in customers who
scored Royal London as 9 or 10 out of 10 across the seven measures, with 70%
of customers now scoring us 7 or higher.
Pensions
Workplace Pensions new business sales in 2025 were in line with 2024 at
£4.5bn following a significant increase in sales in recent years. We welcomed
a further 230,000 Workplace members during the year (2024: 240,000), taking
the total to 2.2m (2024: 2.1m). Supported by further enhancements to our
digital transfer hub and a consolidation awareness campaign, we saw a growing
number of customers transferring their pension savings to Royal London. We
expanded our client management capabilities to support larger employers in
managing their pension schemes. Gross Workplace Pensions flows increased by
10% reflecting our growing book of workplace schemes as well as the impact of
wage inflation, although we continue to see more customers transferring their
savings to alternative providers as they consolidate their pension pots. We
want to support an ever-increasing number of employers to provide quality
retirement savings solutions and so, over the next three years, we will be
investing £100m to enhance our Workplace Pensions offering, allowing us to
support an increasing number of employees with their retirement savings.
Our flagship Governed Range, where most pension customers are invested,
attracted net inflows of £2.6bn in 2025, with AUM at 31 December 2025 growing
by 15% to £83bn (31 December 2024: £72bn). Our Workplace AUM grew 23% over
2025 to £38bn reflecting strong net inflows of £2.8bn and market growth.
In 2025 we launched new governance and insight tools to empower employers. We
introduced a range of education sessions, delivered by our pensions experts,
to help employees engage with their pension and build financial resilience. We
also enhanced our video benefits statements to include expanded content
promoting our mobile app and financial wellbeing support to improve
accessibility for visually impaired customers.
New business sales from Individual Pensions were stable at £4.8bn (2024:
£4.9bn). We saw further growth in non-advised business to £833m (2024:
£643m) as more customers chose to move into retirement with Royal London. We
streamlined services for advisers through improved connectivity to multiple
back-office systems, including becoming an early adopter of the digital Letter
of Authority service. Overall Individual Pensions gross flows were in line
with last year. Net outflows of £0.4bn reflected higher withdrawal activity,
particularly in the second half of the year, influenced in part by customers
responding to Budget speculation.
Innovations in mobile app functionality and retirement planning tools helped
over 36,000 Workplace and Individual Pensions customers make informed
decisions, while our service teams were recognised for excellence by regaining
a five-star rating for Pensions at the Financial Adviser Service Awards. We
retained our five-star Investment Provider rating for the 12th consecutive
year.
We broadened our savings offering for our Individual and Workplace Pensions
customers by successfully launching our Stocks and Shares ISA in September.
This is designed to be simple for individuals to access via our mobile app or
website and easy for employers to offer alongside our workplace pension. The
expansion of our savings offering reflects our commitment to helping customers
to save for their future and feel more secure today. Take-up has been positive
so far with over 1,800 customers already opening an ISA account.
Protection
Protection new business sales increased 17% to £991m (2024: £846m). Growth
was driven by further momentum in Mortgage related business and high net-worth
business, benefitting from our proposition which supports estate planning
needs where demand has increased following the 2024 Budget. This includes
strong performance in our 'Joint Life Second Death' term product, which was
launched in late 2024 alongside our Whole-of-Life offering. The strength of
our proposition, service and distribution support has been recognised through
multiple industry awards. We continue to evolve and improve our Protection
offering, expanding customer choice, supporting our distribution partners and
enhancing our digital capability. We have redesigned our adviser website,
allowing advisers to see real-time policy changes, and supporting retention
activity.
Delivering good customer outcomes remains at the heart of our approach.
532,000 customers are now registered with our online service and nearly a
quarter of a million customers actively use it to access their information and
better understand their plans and options. 98% of protection claims were paid
out during 2025, providing £771m to over 57,000 UK customers and their
families.
Royal London engaged with the FCA on its Pure Protection Market Study into
whether the market is delivering fair value and good outcomes for consumers,
providing input to emphasise the importance of reaching more customers,
transparency, customer value, and market integrity. We continue to work with
industry bodies such as the ABI to ensure this leads to meaningful
improvements for customers, advisers and providers and enables as many people
as possible get the cover they need.
Annuities and Later Life
2025 marked our first full year in the BPA market, following our entry in
September 2024. During the year we completed 18 buy-in transactions with
external pension schemes, covering over 7,800 individuals' benefits and
£1.3bn of premiums. These transactions ranged in size from £7m up to our
£275m transaction with the Grant Thornton Pensions Fund in May. We have now
completed transactions with eight professional trustee firms and 10 different
advisory firms, demonstrating the wide appeal of the only mutual-led offering
in this market.
We continue to expect a significant flow of BPA to come to market over the
coming years, but the addition of new private equity capital will increase
competition. Our BPA offering is benefitting from the Private Assets
capabilities we are building in our Asset Management business, as we are now
able to source a broader range of private asset classes, such as
infrastructure debt and income producing real estate, with attractive
risk-adjusted returns. We are well positioned to meet the needs of trustees
and pension scheme members in our target range of small and mid-sized schemes,
but we will continue to exercise pricing discipline in a rapidly changing
market.
In addition to the transactions with external schemes, we also completed a
£362m partial buy-in with the Royal London Group Pension Scheme in August.
This second tranche, which follows on from last year's initial buy-in, means
that we have now insured the benefits of more than 6,500 members of this
scheme.
Our Individual Annuities proposition is available to Longstanding customers
invested in the RL (CIS) With-Profits Fund with pension policies that have
guaranteed annuity rates. The total new business volumes over 2025 were £123m
(2024: £165m), reflecting the continuing impact of higher interest rates on
annuity take-up rates and premium levels.
Following the rebrand of Responsible Lending Limited to Royal London Equity
Release in 2024, we have now completed the integration of the business into
our core operating model and processes. We launched a new online 'quote and
apply' service, with over 1,000 advisers now registered, and introduced a
drawdown option and lower early repayment charges for our Royal London-funded
proposition. Our advice service, Royal London Equity Release Advisers, has
continued to expand in 2025, with over 2,000 customers receiving specialist
advice on their later life lending options. The service offers access to
specialist whole-of-market advisers for equity release and other later-life
lending products, such as retirement interest-only mortgages.
Longstanding customers
During 2025, our focus has been on delivering good outcomes for our
Longstanding customers (customers of products that are no longer open to new
business). We have taken steps to re-engage with 51,000 Industrial Branch
customers, resulting in 5,700 policy benefits being claimed. In addition, we
reduced annual charges by £1.2m on Unit Linked policies, benefitting 43,000
customers.
We aim to distribute the estate of the closed RL (CIS) With-Profits Fund (CIS
Fund) to relevant policyholders fairly over time. Since our acquisition of the
CIS business in 2013, distributions to eligible Longstanding customers from
the CIS Fund estate have steadily increased, highlighting our continued focus
on managing risks. In April 2025, with-profits policyholders benefitted from a
5% enhancement to their asset shares, increasing the potential for them to
receive higher payouts in the future.
In December 2025 we entered into an agreement to bring in-house the
administration of a significant number of Longstanding customer policies which
are currently outsourced to the Capita plc group (Capita). The move reflects
our commitment to ensuring long-term service quality for our customers, with
the transition of services being carried out in phases over the next five
years.
Looking ahead
Continued investment in our core propositions will create further
opportunities to enhance customer outcomes. We plan to expand the integration
of Private Asset capabilities within our Governed Range, increasing
diversification options for customers. Our planned major investment in our
Workplace Pensions proposition over the next three years will support more
employers with a high‑quality solution, further improving the experience for
members. In addition, we expect to enter into the first of our BPA buy-in to
buy-out conversions.
We remain committed to championing the value of impartial financial advice and
supporting advisers in delivering positive outcomes for their customers. At
the same time, we recognise that full, personalised advice is not accessible
or affordable for everyone. To address this, we will continue to invest in
high‑quality financial guidance and embed this support across our digital
tools and customer experiences. The introduction of Targeted Support should
broaden access to advice for many more customers. By strengthening our digital
guidance capabilities and deepening partnerships with advisers, we aim to help
more customers build long‑term financial resilience.
Asset Management
Market overview
Global equity markets delivered positive returns in 2025 despite periods of
volatility. Global markets began the year positively, although US equities
initially lagged while other regions outperformed. Concerns over the new US
administration's tariffs, initiatives from the Department of Government
Efficiency, and the release of a Chinese AI large language model by DeepSeek,
dented the narrative of US exceptionalism in the early part of the year.
Confidence subsequently returned, with performance into the second half of
2025 increasingly dominated by US equities, particularly large tech firm
stocks. By the end of the year, major global indices had reached new all-time
highs, reflecting robust investor sentiment and resilience across markets,
although some investors are rotating toward money market funds as a defensive
move amid bubble fears.
Bond markets also experienced heightened volatility during the year. Despite
this, sterling credit markets delivered positive returns, primarily driven by
income. Corporate bonds initially underperformed relative to government bonds,
but over the year benefitted from strong investor demand and modest declines
in underlying government bond yields, resulting in positive annual returns.
Responsible investing has faced renewed scrutiny amid political debate,
concerns about greenwashing, and the short-term outperformance of sectors such
as defence and tobacco compared to traditionally sustainable industries. In
contrast to this, some firms have gained mandates from ESG-focused investors
who are divesting from managers perceived to be retreating from sustainability
commitments, creating an opportunity we are well positioned to benefit from.
Business performance
Asset Management operating profit decreased to £39m in 2025 (2024: £59m).
This reflects our continued strategic investment in Private Assets and
Property, which we expected to reduce profitability as we build our
capabilities. It also includes the impact on fee revenues from the effect of
Global Equity and Sustainable outflows across 2024 and 2025 and actions taken
to reduce costs to mitigate the overall impact on profitability.
Our Private Assets business continues to build momentum and we have now
launched two public and one private asset-backed securities funds. These
asset-backed strategies, alongside our growing Private Placements activity and
the first elements of our Commercial Real Estate Finance capability,
strengthen our ability to source a broader range of assets with attractive
risk-adjusted returns to support new business inflows as well as the
development of our BPA business. To accelerate growth and enhance our
capabilities in Private Assets, we completed the acquisition of Dalmore
Capital, a leading UK-based infrastructure asset manager, in November. The
acquisition broadens our investment proposition and enables the ability to
offer retail savers access to the potential long-term returns from private
assets through our Governed Range.
We delivered significant investment and product developments in 2025. We
launched our first Collateralised Loan Obligation (CLO) at the end of 2025 and
our second in February this year. We expanded our global footprint, making our
first hire in Australia and launching four funds in the country. Our
short-term money market fund surpassed £10bn AUM during the year, and we also
launched a Healthcare REIT demonstrating the ongoing development of our
Property business.
Flows and funds
Strong investment performance is fundamental to sustaining long-term growth
and client confidence. Investment performance of actively managed funds(4)
remains competitive with 80% (2024: 81%) of funds outperforming their
three-year benchmark on an equally weighted basis. On an AUM weighted basis
over the three years, 51% (2024: 60%) outperformed their benchmark. Peer
rankings are positive for key open-ended investment companies (OEICs), with
85% (2024: 64%) of funds in the top two quartiles over the three-year period.
The Group's AUM grew to £199.2bn (2024: £173.4bn) driven by positive market
movements of £16.1bn, net inflows of £4.1bn and the acquisition of Dalmore
Capital which contributed £5.6bn. Overall net inflows for the year of £4.1bn
(2024: net outflows of £1.0bn) comprised £2.2bn of net inflows from Asset
Management clients and a further £1.9bn from customers in the life and
pensions business of the Group.
Asset Management net inflows were underpinned by a £4.6bn multi asset
solutions mandate win from St. James's Place and flows into our liquidity
funds, partially offset by reduced Global Equities outflows in the year of
£2.3bn (2024: £4.3bn), following the departure of several members of the
team in 2024, and £1.2bn from Sustainable funds.
Life and pensions net inflows increased to £1.9bn (2024: £1.4bn) supported
by BPA transactions and positive net pensions flows.
Responsible investment
Our Asset Management business takes a distinctive approach to active
management. As part of a customer-owned mutual, we are free from the pressures
of short-term shareholder expectations. Our priority is our clients, and we
focus on delivering long-term investment outcomes. Responsible investing is at
the heart of what we do because we believe that companies with strong
governance and sound management practices make better investments over time.
During 2025, our Asset Management business completed 658 engagements with
investee companies and voted at nearly 4,400 company meetings.
Acting as trusted stewards of our clients' assets has always been central to
our Purpose and will remain so in the future. This commitment aligns closely
with Royal London's strategic objectives, which naturally reinforce a strong
responsible investment philosophy.
We believe that integrating responsible investment principles not only
benefits society, it also enhances returns for our investors. Recognising the
opportunities in this space, we are continually evolving our approach -
investing in our people and infrastructure to play our part in building a more
sustainable world. In April 2025 all eight UK-based funds in our £11bn
Sustainable fund range adopted a Sustainability Focus label under the FCA's
Sustainable Disclosure Requirements (SDR). This milestone highlights our
experience and long-term track record in sustainable investing and underscores
our commitment to help investors navigate the evolving regulatory landscape.
The Sustainability Focus label demonstrates to clients how sustainability
considerations are consistently integrated in our investment decisions,
helping them to make informed decisions. Underlying everything we do is our
commitment to transparency and the belief that interconnectedness - between
our clients, society, and the environment - creates stronger, more resilient
outcomes for all.
Looking ahead
We will continue to enhance our proposition through product innovation,
leveraging modern fund structures such as Exchange Traded Funds and CLOs to
meet an increasingly diverse set of client needs. At the same time, we are
harnessing our Private Assets expertise to generate new revenues as well as
reinforcing our Royal London customer propositions, including the Governed
Range and the BPA business.
Our aim is to be an asset manager that puts clients at the heart of everything
we do. To deliver on this promise we are partnering with leading technology
and service providers to deliver a first-class client experience, with a
unified client interface, on a scalable operating platform. We also continue
to strengthen our organisational commitment to responsible investing,
supporting our Purpose outcomes of helping build financial resilience and
playing our part in moving fairly to a sustainable world.
Ireland
Market overview
The Irish pensions and protection markets continued to show strong growth in
2025, supported by a resilient economy and stable employment, which helped to
sustain customer confidence in long-term financial planning. Modified Domestic
Demand - a core measure of underlying Irish economic activity - grew by
approximately 4% during the year.
Financial brokers remain the leading influence on customers' financial product
choices and are our sole distribution channel in Ireland. Brokers hold the
largest share of the market and play a vital role in delivering high‑quality
advice and a broad range of options to customers. We continue to work closely
with brokers to support their businesses - providing tools, technical guidance
and service enhancements to help them meet evolving customer needs and deliver
good long‑term outcomes.
Business performance
In 2025, new business sales grew 64% to £488m. This strong growth was across
both Protection and Pensions and resulted in an Ireland operating profit of
£17m (2024: £10m).
Royal London Ireland remains the leading provider of protection products in
the broker market, and our position as pensions provider continues to grow,
driven by our strong product proposition and consistently high service
standards. We were recognised for the eighth consecutive year by Brokers
Ireland for the service we deliver to brokers and their customers.
Customer service remains central to our proposition. Our Trustpilot reviews
consistently averaged five stars throughout 2025, reflecting our focus on
clear communication and customer support. Towards the end of the year, we
launched a nationwide advertising campaign highlighting our five-star
Trustpilot score across radio, print, out-of-home and social media. The
campaign conveyed our pride in delivering consistent excellent customer
service and encouraged people to engage with their financial broker.
Protection
Sales of our Protection products grew to £202m (2024: £188m) reflecting our
continued focus on maintaining our strong Protection position and helping
customers and their families protect and build their financial resilience.
Sales of our core Protection products have increased year-on-year with
significant growth in Serious Illness volumes in particular following product
enhancements introduced in late 2024.
Financial brokers continued to rate Royal London Ireland as the best provider
for protection products in 2025. Our competitive value for customers and
claims ethos were factors contributing to this award.
This year, we introduced a further digital enhancement to our underwriting
service. This offers a faster and more secure option for customers' general
practitioners to provide medical reports, so that customers can get the cover
they need quickly and with confidence.
In 2025, we paid out 99% of claims - totalling £50m to 4,800 customers and
their families in Ireland - providing vital support when it mattered most. In
addition, with our Helping Hand support service, customers have access to
specialist nurses, counselling and practical help, offering care that goes
beyond financial protection.
Pensions
Our Pensions new business sales more than doubled to £286m for the year
(2024: £109m) as we saw more financial brokers choosing to recommend our
pension products - giving customers even more choice across Approved
Retirement Funds, Personal Retirement Bonds and Personal Retirement Savings
Accounts (PRSAs) to help secure their futures. This growth is reflective of
our first full year providing PRSAs, which launched in November 2024, with our
regular premium PRSA already our most popular product.
We introduced an online suitability tool and sustainable investing resources,
making it easier for brokers and customers to match sustainable investing
goals, risks and values with more confidence. We celebrated four years since
our Multi Asset funds launched in the Irish market, and also reclassified our
Multi Asset Funds as Article 8 under the Sustainable Finance Disclosure
Regulation (SFDR), to improve transparency, so customers can see how their
investments align with environmental and social standards.
In April 2025, we announced our third ValueShare award - another way we share
our success - giving eligible customers a boost of 0.13% to their policies.
This feature is unique in the Irish market and is demonstrative of our mutual
mindset.
Looking ahead
We are investing in digital tools and systems to enhance our offering to
customers and brokers, and to continue to offer compelling products that meet
their needs. We remain a firm advocate of the benefits of impartial financial
advice in helping customers to build and secure their financial resilience and
are focused on delivering the best possible outcomes for customers and
brokers.
With the Irish government's auto-enrolment initiative, MyFutureFund, which
launched in January 2026, more people will have access to pensions - an
important step towards wider pension coverage. With this increased focus on
pensions, the role that financial brokers play becomes more important than
ever, helping to provide the necessary advice to employers and employees and
to explore other product options that may better suit individual needs within
the existing pension taxation regime.
Financial Review
Group operating profit(c) for the year ended 31 December 2025 increased by
18% to £327m (2024: £277m). Our Pensions business is the largest contributor
to our results which has been supported by strong growth in Workplace Pensions
over recent years. Having launched our Stocks and Shares ISA, we are now
focused on how we support millions more customers with their retirement
savings and will be investing £100m over the next three years in our
Workplace proposition. The increasing breadth of products we offer has driven
the growth in 2025 operating profit with higher new business contribution from
our Protection business and the first full year of trading from our BPA
proposition, launched in the second half of 2024.
Assets under management rose to a record £199bn, supported by market growth
and the acquisition of Dalmore Capital. As expected, the contribution from our
Asset Management business decreased as a consequence of our continued
investment in new capabilities to support future growth, combined with the
full year impact of net outflows from our Global Equities strategies across
2024 and 2025.
ProfitShare for the year totalled £199m (2024: £181m), with allocation rates
consistent with previous years. This reflects our ongoing commitment to
sharing returns with eligible customers, helping to enhance the long-term
value of their savings.
The transfer to the fund for future appropriations (FFA) of £167m (2024:
£167m) includes additional items not recognised in operating profit,
including a one-off charge of £51m to reflect the expected impact of
transitioning a number of legacy servicing arrangements to Royal London from
Capita over the next five years, ProfitShare allocations and tax charges,
partially offset by positive economic movements during the year.
Our capital position remains robust with an estimated Solvency II Investor
View capital cover ratio of 188% (31 December 2024: 203%). Over 2025 we have
used our capital position to support the acquisition of Dalmore Capital and to
write new BPA business during the year. The estimated Solvency II Regulatory
View capital cover ratio decreased to 183% (31 December 2024: 196%).
Group adjusted operating profit
The following table shows Group operating profit c (#_edn3) for the year
ended 31 December 2025. Further details of the Group's segmental reporting is
included in note 2 of the Financial Statements.
2025 2024 Change
£m £m £m
Long-term business
New business contribution 281 209 72
Existing business contribution 287 289 (2 )
Contribution from AUM and other businesses 74 81 (7 )
Business development costs (68 ) (54 ) (14 )
Strategic development costs (75 ) (71 ) (4 )
Amortisation of intangibles (18 ) (17 ) (1 )
Result from operating segments 481 437 44
Corporate items (67 ) (73 ) 6
Financing costs (87 ) (87 ) -
Group adjusted operating profit 327 277 50
New business contribution
New business contribution increased to £281m (2024: £209m), including £45m
from the first full year of trading in our BPA business. New business margin
for the year improved to 2.3% (2024: 1.9%). Performance was particularly
strong in our Protection business, reflecting growth in sales to the high
net-worth segment, with the favourable product mix supporting the growth in
margins. While new business sales on a present value of new business premiums
(PVNBP) basis in our pension products were flat year on year, new business
contribution reduced, reflecting changing new business mix and higher relative
costs.
New business contribution PVNBP New business
margin
2025 2024 2025 2024 2025 2024
£m £m £m £m % %
Individual Pensions 55 66 4,797 4,850 1.1 1.4
Workplace Pensions 80 85 4,501 4,459 1.8 1.9
Protection 77 27 991 846 7.7 3.2
Bulk Purchase Annuities 45 7 1,262 187 3.6 4.0
Individual Annuities and other 7 11 161 165 4.2 6.6
UK 264 196 11,712 10,507 2.2 1.9
Ireland 17 13 488 297 3.6 4.3
Total 281 209 12,200 10,804 2.3 1.9
UK
Individual Pensions new business sales were £4,797m (2024: £4,850m). The
reduction in volumes year on year reflected lower levels of advised business
across both accumulation and drawdown, although we saw growth in our
non-advised Income Release proposition. The changing mix and the impact of
lower charges for customers with smaller pension pots led to new business
margins decreasing to 1.1% (2024: 1.4%), with new business contribution
reducing to £55m (2024: £66m) as a result.
Workplace Pensions new business sales rose slightly to £4,501m (2024:
£4,459m). We saw 3% growth in both transfers and new entrants into existing
schemes supported by continued enhancements to our digital transfer hub and
broader developments in our Workplace proposition. New scheme sales volumes
were lower, primarily as a result of two larger scheme wins in 2024. The
changing mix of new business and higher relative costs resulted in new
business contribution and margin decreasing to £80m (2024: £85m) and 1.8%
(2024: 1.9%) respectively.
Protection new business sales grew by 17% to £991m. Growth was driven by
increased demand for Whole‑of‑Life and 'Joint Life Second Death' term
products, particularly among high‑net‑worth customers focusing on estate
planning following Budget changes to inheritance tax announced in late 2024.
This shift to higher-case sizes and resulting favourable product mix improved
new business margin to 7.7% (2024: 3.2%), with new business contribution
rising to £77m (2024: £27m).
Following our launch into the BPA market during the second half of 2024, we
successfully transacted with a further 18 new external pension schemes in
2025, generating new business sales of £1,262m (2024: £187m) at a new
business margin of 3.6% (2024: 4.0%).
Individual Annuities and other new business sales were £161m (2024: £165m),
including £38m relating to our newly launched Stocks and Shares ISA.
Individual Annuities sales fell due to lower take-up of guaranteed annuity
rates in a higher interest rate environment. New business contribution
decreased to £7m (2024: £11m) with margins also lower at 4.2% (2024: 6.6%).
Ireland
New business sales grew to £488m (2024: £297m), primarily through increased
Pensions sales of £286m (2024: £109m) following the launch of our regular
premium Personal Retirement Savings Account product in late 2024. Protection
new business sales rose to £202m (2024: £188m) due to increased volumes in
serious illness and income protection. New business contribution increased to
£17m (2024: £13m), while new business margin decreased to 3.6% (2024: 4.3%)
reflecting the increasing proportion of Pensions sales within overall volumes.
Existing business contribution
Existing business contribution increased to £287m (2024: £289m), summarised
in the table below.
2025 2024 Change
£m £m £m
Expected return 283 255 28
Experience variances and assumption changes 47 (9 ) 56
Modelling and other changes (43 ) 43 (86 )
Total 287 289 (2 )
Expected return for the year increased by £28m to £283m, mainly due to a
half percentage-point increase in the risk-free rate compared to the rate
applied in 2024.
Experience variances and assumption changes represented a gain of £47m (2024:
£9m charge). This includes the positive impact of higher than expected
Workplace Pensions premiums received during the year and a charge for
persistency assumption changes, particularly with respect to the assumed level
of pension transfers as customers consolidate their pension pots.
Modelling and other changes represented a charge of £43m (2024: £43m gain)
as part of ongoing refinements to ensure that our actuarial models remain as
reliable as possible.
Contribution from AUM and other businesses
Contribution from AUM and other businesses decreased to £74m (2024: £81m),
primarily due to expected reductions in the contribution from our Asset
Management business. This followed investment in new capabilities to support
future growth including in Private Assets and Property, and a reduction in
margins following outflows on Global Equities and Sustainable funds across
2024 and 2025.
Business development costs
Business development costs increased to £68m (2024: £54m) as we continued to
strengthen our propositions in our UK and Asset Management businesses. In the
UK, costs of £46m (2024: £38m) included those to enhance our digital
services, including our mobile app and website, and to improve our customer
experience. Asset Management costs of £22m (2024: £16m) were incurred as we
continued to develop data and technology to enhance client service and
reporting, alongside investment in new capabilities such as Private Assets and
CLOs.
Strategic development costs
Strategic development costs of £75m (2024: £71m) reflect the costs of
ongoing longer-term investment we are making across our businesses. £73m
relates to the UK business as we launched our Stocks and Shares ISA, further
developed our BPA capabilities ahead of our first buy-out in 2026, and
enhancements to our digital advice tools in preparation for the launch of
Targeted Support in 2026. Costs in our Asset Management and Ireland segments
reduced following the completion of their respective key projects during 2024.
Amortisation of intangibles
Amortisation of intangibles of £18m (2024: £17m) relates to capitalised
software assets.
Corporate items and financing costs
The net charge for Corporate items of £67m (2024: £73m) includes costs
arising from strengthening the Group's operational resilience, investing in
our data capabilities, responding to regulatory change and items relating to
the Group's defined benefit pension schemes.
Financing costs of £87m (2024: £87m) primarily represent the interest
payable on the Group's subordinated debt.
Reconciliation of Group adjusted operating profit to transfer to the FFA
The transfer to the FFA of £167m (2024: £167m) was lower than our operating
profit primarily due to ProfitShare allocations and tax.
2025 2024 Change
£m £m £m
Group adjusted operating profit 327 277 50
Economic movements 176 179 (3 )
Loss arising from acquisitions and other corporate transactions (43 ) (15 ) (28 )
ProfitShare (199 ) (181 ) (18 )
Profit before tax and before transfer to the fund for future appropriations 261 260 1
Tax attributable to long-term business (94 ) (93 ) (1 )
Transfer to the fund for future appropriations 167 167 -
Economic movements
Economic movements include £180m (2024: £66m charge) of short-term
investment return variances from our longer-term expected return assumptions
on the surplus assets of the RL Main Fund, for which the overall return was
8.9% during 2025 (2024: 5.1%). It also includes a £70m gain (2024: £258m
gain) from changes to economic assumptions used to value liabilities,
primarily due to changes in risk-free rates. The remaining charge of £74m
(2024: £13m charge) comprises other economic-related modelling and other
changes.
Loss arising from acquisitions and other corporate transactions
The loss arising from acquisitions and other corporate transactions comprises
amortisation of goodwill and acquisition-related intangible assets,
adjustments in respect of prior acquisitions and a one-off charge to reflect
the expected impact of transitioning a number of legacy servicing arrangements
to Royal London from Capita over the next five years.
During the year the Group purchased Dalmore Capital, a UK-based infrastructure
asset manager, for an initial cash consideration of £103m plus deferred
consideration of up to £35m. Goodwill and intangible assets totalling £151m
were recognised as part of the transaction which is now being amortised.
In December 2025, the Group reached an agreement with Capita to bring in-house
the administration of longstanding customer policies currently outsourced to
Capita. The transition of services will be carried out in phases over the next
five years. Pursuant to the agreement, Royal London received approximately
4.96% of Capita plc's issued share capital, subject to customary lock-up
arrangements during the migration, with a further three payments of £10m each
to be received in stages on the first, second and third anniversary of the
migration completion. Included within the loss arising from acquisitions and
other corporate transactions is a charge of £51m for the estimated costs of
migrating operations and the impact on insurance contract liabilities for the
change in post‑migration servicing costs resulting from the agreement,
partially offset by the recognition of the present value of Capita plc shares
transferred and future completion milestone payments to be paid by Capita.
ProfitShare
ProfitShare represents an allocation of part of the Group's profits by means
of a discretionary enhancement to asset shares and unit fund values of
eligible policies of UK customers. Also included is ValueShare, which provides
a discretionary enhancement to unit fund values for eligible policies of
customers in Ireland.
ProfitShare allocation rates for 2025 were maintained, with total ProfitShare
for the year increasing to an estimated £199m (2024: £181m). The
enhancements from ProfitShare were 1.2% or 0.3% for eligible With-Profits
policies (2024: 1.2% and 0.3% respectively) and 0.15% for eligible unit-linked
policies (2024: 0.15%).
Balance sheet
Over the course of 2025, our total investment portfolio d (#_edn4) increased
in value to £139.1bn (31 December 2024: £124.6bn), as a result of increases
in fair value, primarily in equity and bond asset classes, and positive net
life and pensions flows. At 31 December 2025, £3,416m of assets were
ring-fenced (31 December 2024: £1,748m) in the Matching Adjustment (MA)
portfolio. The MA portfolio of assets grows as we write more BPA business. It
includes a mix of corporate bonds, gilts, cash, commercial real estate loans,
income producing real estate and infrastructure debt.
Our financial investment portfolio remains well diversified across a number of
financial instrument classes, with the majority invested in equity securities
and fixed income assets.
A significant portion of our debt securities portfolio is in assets with a
credit rating of 'A' or above. In our non-linked portfolio, 77% (31 December
2024: 78%) of our non-linked debt securities and 67% (31 December 2024: 69%)
of our non-linked corporate bonds had a credit rating of 'A' or better at 31
December 2025. There have been no defaults in our corporate bond portfolio.
Assets under management
Assets under management (AUM) increased to £199bn (31 December 2024: £173bn)
including £6bn from the acquisition of Dalmore Capital and positive market
movements of £16bn.
Gross Inflows Net inflows/(outflows)
2025 2024 2025 2024
£m £m £m £m
Asset Management 29,176 20,280 2,239 (2,432 )
Pensions 11,127 10,383 2,627 3,213
Annuities 1,799 754 1,646 663
Longstanding customers and other life and pensions 387 408 (2,407 ) (2,481 )
Life and pensions 13,313 11,545 1,866 1,395
Total 42,489 31,825 4,105 (1,037 )
Asset Management represents flows from external clients into our Asset
Management business. These improved to a £2.2bn net inflow (2024: £2.4bn net
outflow) which included a £4.6bn multi asset mandate from St. James's Place.
Net outflows from other strategies totalled £2.4bn including net outflows of
£2.3bn in Global Equities and £1.2bn from Sustainable funds partly offset by
net inflows into our liquidity funds.
Life and pensions represents flows generated from our Life and Pensions
business. These increased to £1.9bn (2024: £1.4bn), driven by positive
Workplace Pensions net inflows and the BPA buy-in policies transacted with
external pension schemes and the Royal London Group Pension Scheme (RLGPS) in
the year. Longstanding customers and other life and pensions flows were a net
outflow of £2.4bn (2024: £2.5bn), primarily reflecting the run-off of
products that are no longer open to new business.
Pension schemes
The Group operates three defined benefit pension schemes. The net surplus of
the three schemes at 31 December 2025 was £134m (31 December 2024: £164m).
The largest scheme, RLGPS, had a surplus of £78m as at 31 December 2025 (31
December 2024: £108m). The scheme remains well funded, with high levels of
hedging within the scheme and relatively low allocations to growth assets.
On 18 August 2025 the trustees of the RLGPS Scheme transacted a second BPA
buy-in policy with RLMIS, with approximately 40% of the liabilities related to
the scheme now being covered by buy-in policies.
The Group's two other schemes operate for former Royal Liver employees. The
Royal Liver UK and Royal Liver Ireland schemes are similarly well funded and
had surpluses as at 31 December 2025 of £21m and £35m respectively (31
December 2024: £23m and £33m).
Strength of our capital base
The strength of our capital base is essential to our business, both to ensure
we have the capital to fund further growth and to give peace of mind to our
customers that we can meet our commitments to them.
Managing our capital base effectively is a key priority for us. In common with
others in the industry, we present two views of our capital position: an
Investor View for analysts and investors in our subordinated debt; and a
Regulatory View where the closed funds' surplus is excluded as a restriction
to Own Funds.
We review our capital management framework regularly, although we would not
expect the ranges within which we manage our capital to change frequently. On
an Investor View basis, we manage the solvency coverage ratio (the investor
ratio) within an acceptable range, the lower end of which is 165%. In the
ordinary course of business, we expect to operate with an investor ratio above
180%, although the ratio may fall below that level for a period as a result of
investing for long-term growth or as a result of market events. Given the
business is managed for the benefit of its members and customers on a
long-term basis, the level of the investor ratio of the business may also be
higher to provide flexibility for future investment in the business. We expect
the Regulatory View solvency coverage ratio to be above 150%.
Key metrics 31 December 2025 (estimated) 31 December 2024
Regulatory View solvency surplus £2,525 m £ 2,745 m
Regulatory View capital cover ratio 183 % 196 %
Investor View solvency surplus £2,525 m £ 2,745 m
Investor View capital cover ratio 188 % 203 %
The reduction in both Regulatory and Investor View cover ratios reflects our
ongoing investment in the business including a 5% impact from the acquisition
of Dalmore Capital and a 4% capital strain from writing BPA business, as well
as the impact of the transition agreement reached with Capita. We expect the
investor ratio to continue to reduce gradually over the short term as we write
more BPA business and continue to invest in additional capabilities.
The Group's Solvency Capital Requirement reflects the diversified nature of
our market and insurance risk exposures. In particular, longevity risk written
through our Annuities businesses diversifies well with other risks of the
in-force book of business.
We continue to broaden the range of illiquid assets we invest in within the
Matching Adjustment Portfolio and entered into a new private placement credit
mandate with RLAM during the year. We also successfully gained regulatory
approvals for infrastructure debt and income-producing real estate debt
assets, broadening the scope of illiquid debt assets available for investment.
Within the UK, Royal London has one closed fund, the RL(CIS) Fund. The capital
and liquidity position of this closed fund is managed on a standalone basis.
The fund continues to be well capitalised with the residual estate being
distributed to policyholders over time.
We continue to monitor closely our capital position given market volatility
and wider global economic pressures. Scenario testing performed as part of our
regular capital management activities demonstrates that our capital position
continues to be robust under a number of severe but plausible market
scenarios.
The estimated Solvency II leverage ratio e (#_edn5) is 23% (31 December 2024:
22%), with the level of outstanding debt unchanged over the year.
Sensitivity analysis of Group Solvency II capital position
Our capital position is sensitive to changes in economic and non-economic
assumptions. The 'Solvency II Investor View sensitivities' table below sets
out a sensitivity analysis of the estimated capital cover ratio and solvency
surplus based on possible different scenarios. The results of the sensitivity
analysis show that the Group capital position is not materially impacted even
in the event of significant external market volatility.
The 2025 Single Group Solvency and Financial Condition Report will be
published on our website by April 2026.
Scenario f (#_edn6) Investor View capital cover ratio Impact on solvency surplus
(%) (£bn)
Base scenario: 31 December 2025 188 2.5
25% decrease in equity investments 5 (0.1 )
15% decrease in property prices (1 ) (0.1 )
100bps rise in interest rates g (#_edn7) 2 -
100bps fall in interest rates g (#_edn7) (3 ) -
25bps increase in government bond yields h (#_edn8) (1 ) -
200bps widening in credit spreads i (#_edn9) 3 -
20% of assets downgrading in MA Portfolio j (#_edn10) (1 ) -
15% fall in GBP exchange rates (3 ) 0.1
PRA Life Insurance Stress Test (LIST) 2025 k (#_edn11) (1 ) (0.4 )
Rating agencies
Two leading agencies, Standard & Poor's (S&P) and Moody's, regularly
issue ratings on us. We carry an 'A' rating from S&P Global Ratings with a
stable outlook and an 'A2' rating with Moody's, also with a stable outlook.
Tax
We are a major taxpayer and recognise that taxation is an essential way for
businesses and individuals to contribute to society.
We are subject to various taxes, including corporate taxes, employment taxes
on salaries and indirect taxes such as VAT. The corporation tax that the
Company pays is a proxy for policyholder tax liabilities, paid on behalf of
certain life assurance policyholders. For these life policies, tax is charged
on taxable income, less expenses, and is largely driven by market movements.
This tax is paid directly to HMRC by the Company as corporation tax on behalf
of policyholders.
For pension policies, returns to the policyholder accumulate without incurring
a similar corporation tax charge. This is part of the UK government's strategy
of incentivising saving for retirement. Tax is paid directly by the pension
policyholder when they receive their pension.
In 2025, the total tax contribution of the Group was £701m (2024: £651m).
This is made up of £151m (2024: £132m) incurred directly by the Group and
that impact our results, and £550m (2024: £519m) administered by the Group
and collected from others for onward payment to HMRC and other tax
authorities. During the year there was a net repayment of UK corporation tax
of £7m. This repayment has been excluded from the numbers above. The numbers
above also exclude transition and withholding taxes suffered by investment
funds that are not consolidated.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out in the
'Principal risks and uncertainties' section of the Strategic Report within
Royal London's 2025 Annual Report and Accounts (ARA)
(royallondon.com/about-us/our-performance/investor-relations/
(https://www.royallondon.com/about-us/our-performance/investor-relations/) ).
The risks and uncertainties continue to be monitored and managed through our
risk management system, including those related to the economy and Royal
London's key markets, the risks associated with climate change and cyber
security, and the political and regulatory environment.
Forward-looking statements
Royal London may make verbal or written 'forward-looking statements' within
this announcement, with respect to certain plans, its current goals and
expectations relating to its future financial condition, performance, results,
operating environment, strategy and objectives. Statements that are not
historical facts, including statements about Royal London's beliefs and
expectations and including, without limitation, statements containing the
words 'may', 'will', 'should', 'continue', 'aims', 'estimates', 'projects',
'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates', and
words of similar meaning, are forward-looking statements. The statements are
based on plans, estimates and projections as at the time they are made and
involve unknown risks and uncertainties. These forward-looking statements are
therefore not guarantees of future performance and undue reliance should not
be placed on them.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances, some of which will be
beyond Royal London's control. Royal London believes factors could cause
actual financial condition, performance or other indicated results to differ
materially from those indicated in forward-looking statements in the report.
Potential factors include but are not limited to: geopolitical conditions; the
impact of international unrest and conflicts; UK and Ireland economic and
business conditions; future market-related risks such as high interest rates;
and the performance of financial markets generally; the policies and actions
of governmental and regulatory authorities (for example, new government
initiatives); the impact of competition; the effect on Royal London's business
and results from, in particular, mortality and morbidity trends, lapse rates;
and the timing, impact and other uncertainties of future mergers or
combinations within relevant industries. These and other important factors
may, for example, result in changes to assumptions used for determining
results of operations or re-estimations of reserves for future policy
benefits.
As a result, Royal London's future financial condition, performance and
results may differ materially from the plans, estimates and projections set
forth in Royal London's forward-looking statements. Royal London undertakes no
obligation to update the forward-looking statements in this announcement or
any other forward-looking statements Royal London may make. Forward-looking
statements in this announcement are current only at the date on which such
statements are made. This announcement has been prepared for the members of
Royal London and no one else. None of Royal London, its advisers or its
employees accept or assume responsibility to any other person and any such
responsibility or liability is expressly disclaimed to the extent not
prohibited by law. The Royal London Mutual Insurance Society Limited is
registered in England and Wales (99064) at 80 Fenchurch Street, London, EC3M
4BY. www.royallondon.com (http://www.royallondon.com/)
Financial Statements
Consolidated statement of comprehensive income
for the period ended 31 December 2025
Group
Technical account - long-term business 2025 2024
£m £m
Gross premiums written 2,997 1,851
Outwards reinsurance premiums (583 ) (358 )
Earned premiums, net of reinsurance 2,414 1,493
Investment income 5,697 4,643
Unrealised gains on investments 7,711 5,046
Other income 786 728
Total income 16,608 11,910
Claims paid
Gross claims paid (3,365 ) (3,318 )
Reinsurers' share 756 616
Change in provision for claims
Gross amount (19 ) 11
Reinsurers' share (34 ) 46
Claims incurred, net of reinsurance (2,662 ) (2,645 )
Change in long-term business provision, net of reinsurance
Gross amount (1,503 ) 268
Reinsurers' share (290 ) 12
(1,793 ) 280
Change in technical provision for linked liabilities, net of reinsurance (10,732 ) (8,247 )
Change in technical provisions, net of reinsurance (12,525 ) (7,967 )
Change in non-participating value of in-force business 299 309
Net operating expenses (720 ) (652 )
Investment expenses and charges (456 ) (409 )
Other charges (283 ) (286 )
Total operating expenses (1,459 ) (1,347 )
Profit before tax and before transfer to the fund for future appropriations 261 260
Tax attributable to long-term business (94 ) (93 )
Transfer to the fund for future appropriations 167 167
Balance on technical account - long-term business - -
Other comprehensive income, net of tax:
Remeasurement of defined benefit pension schemes (28 ) (7 )
Foreign exchange rate movements on translation of Group entities 13 (10 )
Deduction from the fund for future appropriations (15 ) (17 )
Other comprehensive income for the year, net of tax - -
Total comprehensive income for the year - -
As a mutual company, all earnings are retained for the benefit of
participating policyholders and are carried forward within the fund for future
appropriations. Accordingly, the total comprehensive income for the year is
always £nil after the transfer to or deduction from the fund for future
appropriations.
Balance sheets
as at 31 December 2025
Group Company
2025 2024 2025 2024
£m £m £m £m
ASSETS
Intangible assets
Goodwill 90 33 14 17
Negative goodwill (20 ) (25 ) (2) (3)
70 8 12 14
Other intangible assets 210 134 103 109
280 142 115 123
Non-participating value of in-force business 3,383 3,085 3,378 3,085
Investments
Land and buildings 36 75 36 75
Investments in Group undertakings and participating interests - - 14,451 14,040
Other financial investments 35,071 33,275 21,421 19,884
35,107 33,350 35,908 33,999
Assets held to cover linked liabilities 104,017 91,279 103,620 91,113
Reinsurers' share of technical provisions
Long-term business provision 2,967 3,278 2,920 3,231
Claims outstanding 156 141 140 124
Technical provisions for linked liabilities (66 ) (57 ) (66 ) (57 )
3,057 3,362 2,994 3,298
Debtors
Debtors arising out of direct insurance operations 57 21 54 19
Debtors arising out of reinsurance operations 57 61 46 46
Other debtors 3,375 3,280 3,246 3,161
3,489 3,362 3,346 3,226
Other assets
Deferred taxation 7 3 - -
Tangible fixed assets 28 25 - -
Cash at bank and in hand 454 499 275 282
489 527 275 282
Prepayments and accrued income
Deferred acquisition costs on investment contracts 49 50 27 42
Other prepayments and accrued income 77 62 2 1
126 112 29 43
Pension scheme asset 134 164 134 164
Total assets 150,082 135,383 149,799 135,333
LIABILITIES
Subordinated liabilities 1,286 1,284 1,286 1,284
Fund for future appropriations 4,408 4,256 4,808 4,529
Technical provisions
Long-term business provision 32,306 30,906 32,435 31,001
Claims outstanding 428 404 384 365
32,734 31,310 32,819 31,366
Technical provisions for linked liabilities 103,804 91,072 103,407 90,906
Provisions for other risks
Deferred taxation 214 107 197 109
Other provisions 177 176 148 172
391 283 345 281
Creditors
Creditors arising out of direct insurance operations 292 300 271 280
Creditors arising out of reinsurance operations 1,494 1,540 1,482 1,530
Amounts owed to credit institutions 61 27 60 27
Other creditors including taxation and social security 5,430 5,123 5,321 5,118
7,277 6,990 7,134 6,955
Accruals and deferred income 182 188 - 12
Total liabilities 150,082 135,383 149,799 135,333
Notes to the Financial Statements
1. Basis of preparation
The Financial Statements of the Group have been prepared in accordance with
the recognition and measurement requirements of UK accounting standards,
including Financial Reporting Standard (FRS) 102, 'The Financial Reporting
Standard applicable in the United Kingdom and the Republic of Ireland' and FRS
103, 'Insurance Contracts'.
The accounting policies applied in the Financial Statements are the same as
those applied in the Group's 2025 ARA. The full UK GAAP accounting policies
can be found in the Group's 2025 ARA on the Royal London website
(royallondon.com/about-us/our-performance/investor-relations/
(https://www.royallondon.com/about-us/our-performance/investor-relations/) ).
The Results Announcement for the year ended 31 December 2025 does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The financial information in this Results Announcement has been derived
from the Group Financial Statements within the Group's 2025 ARA. The Group's
2024 ARA has been filed with the Registrar of Companies, and the 2025 ARA will
be filed in due course. The results on a UK GAAP basis for the full year 2025
and 2024 have been audited by KPMG LLP (KPMG). Both their reports were (i)
unqualified, (ii) did not include a reference to any matters to which they
drew attention by way of emphasis without qualifying their report, and (iii)
did not contain a statement under section 498 (2) or (3) of the Companies Act
2006.
The Financial Statements have been prepared on a going concern basis under the
historical cost convention, as modified by the inclusion of certain assets and
liabilities at fair value as permitted or required by FRS 102.
The Group regularly performs sensitivities and stress testing on a range of
severe but plausible scenarios. Stress testing has been performed on the
capital position for severe adverse economic and demographic impacts arising
over the short to medium term, and on the liquidity position for severe
adverse economic impacts over the short term. The most adverse scenarios
contain severe but plausible assumptions including adverse economic and
insurance risk impacts, prolonged effects from cost of living pressures and
subdued financial markets, significant third party failure and the effects of
climate change on economic and insurance risks. There are a range of
management actions, both in the RL Main Fund and the closed RL (CIS)
With-Profits Fund, available to the directors in stress scenarios which could
be considered if there were a deterioration in the capital and/or liquidity
position of the Group, to restore the position back within risk appetite.
Sufficient liquidity is available to settle liabilities as they fall due and
the capital and liquidity positions remain sufficient to cover capital
requirements and liquidity requirements respectively in all scenarios tested.
Having considered these matters and after making appropriate enquiries, the
directors are satisfied that the Group has adequate resources to continue to
operate as a going concern for a period of at least 12 months from the date of
approval of the Financial Statements. For this reason, they consider it
appropriate to continue to adopt the going concern basis in preparing the
Financial Statements. The directors have also concluded that there are no
material uncertainties over the Group's ability to adopt the going concern
basis of accounting.
2. Segmental information
Operating segments
The operating segments reflect the level within the Group at which key
strategic and resource allocation decisions are made and the way in which
operating performance is reported internally to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Company's Board of Directors.
The activities of each operating segment are described below:
UK
The UK business provides propositions to customers, employers and pension
scheme trustees, primarily through intermediaries. Products offered include
workplace and individual pensions, as well as protection products, ISA
savings, bulk purchase annuities and other later life offerings.
Asset Management
The Asset Management business provides investment propositions to Royal
London's life and pensions customers and to external institutional and
wholesale clients, primarily through intermediaries.
Ireland
The Ireland business provides propositions to customers through brokers.
Products offered include individual pensions and protection products.
Group adjusted operating profit
A key measure used by the Company's Board of Directors to monitor performance
is Group adjusted operating profit, which is classed as an Alternative
Performance Measure. The Company's Board of Directors consider that this
facilitates comparison of the Group's performance over reporting periods as it
provides a measure of the underlying trading of the Group.
Group adjusted operating profit excludes short-term investment return
variances. Expected return therefore represents the longer-term investment
return expected to be generated by the net assets of the Royal London Main
Fund based on our opening economic assumptions applied to assets held at the
start of the year. Any differences between the expected and actual investment
return are shown outside of Group adjusted operating profit within Economic
movements.
The results by segment, forming part of the Group's adjusted operating profit,
are shown in the following table.
Group - 2025
UK Asset Management Ireland Total
£m £m £m £m
Long-term business
New business contribution 264 - 17 281
Existing business contribution 285 - 2 287
Contribution from AUM and other businesses 7 67 - 74
Business development costs (46 ) (22 ) - (68 )
Strategic development costs (73 ) - (2 ) (75 )
Amortisation of intangibles (12 ) (6 ) - (18 )
Result from operating segments 425 39 17 481
Corporate items (67 )
Financing costs (87 )
Group adjusted operating profit 327
Group - 2024
UK Asset Management Ireland Total
£m £m £m £m
Long-term business
New business contribution 196 - 13 209
Existing business contribution 287 - 2 289
Contribution from AUM and other businesses (8 ) 89 - 81
Business development costs (38 ) (16 ) - (54 )
Strategic development costs (58 ) (8 ) (5 ) (71 )
Amortisation of intangibles (11 ) (6 ) - (17 )
Result from operating segments 368 59 10 437
Corporate items (73 )
Financing costs (87 )
Group adjusted operating profit 277
a (#_ednref1) 'Operating profit' represents the APM measure 'Group adjusted
operating profit'
b (#_ednref2) Based on total 2022 premium income. International Cooperative
and Mutual Insurance Federation Global 500 Report, 2024
c (#_ednref3) References to 'Group operating profit' represent the APM
measure 'Group adjusted operating profit'
d (#_ednref4) The investment portfolio is the total of 'Investments' and
'Assets held to cover linked liabilities' in the Group Balance sheet
e (#_ednref5) Solvency II leverage ratio is the Solvency II value of the
Group's outstanding debt (which is entirely subordinated liabilities) divided
by the Group's estimated Solvency II Own Funds (Regulatory View).
f (#_ednref6) Sensitivities include movements in the Transitional Measure on
Technical Provisions (TMTP), which was formally recalculated at 31 December
2025. The sensitivities do not include any subsequent rebalancing of the asset
portfolio.
g (#_ednref7) Interest rate sensitivities assume that government and other
bond yields and risk-free rates all move by the same amount. Interest rates
are allowed to be negative.
h (#_ednref8) The government bond yield sensitivity assumes risk-free rates
and other yields remain constant. The Matching Adjustment rate and Volatility
Adjustment have been reassessed in the stressed scenario.
i (#_ednref9) The widening in credit spreads stress assumes a widening in
all ratings and an associated increase in the discount rate for the Royal
London Group Pension Scheme and Royal Liver pension schemes at 25% of the
asset spread stress. The Matching Adjustment rate and Volatility Adjustment
have been reassessed in the stressed scenario.
j (#_ednref10) The 20% assets downgrade scenario assumes a uniform downgrade
across all asset class holdings in the Matching Adjustment (MA) portfolio,
with no recovery in asset holdings. The MA rate has been reassessed in the
stress scenario.
k (#_ednref11) Relates to the results of stage 3 of the Financial markets
(core) stress scenario from the PRA LIST 2025 exercise.
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