REG - Phoenix Group Hldgs - 2025 Interim Results
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RNS Number : 3793Y Phoenix Group Holdings PLC 08 September 2025
Phoenix Group Holdings plc: 2025 Interim Results Announcement 8 September 2025
Strong growth and strengthening Solvency balance sheet
Delivering against strategic priorities
Improved leverage and solvency ratios
Firmly on track to meet 2026 targets
"This is a strong first half performance with progress against all key
financial metrics we use to drive the business, demonstrating continued
momentum towards our 2026 targets. We are increasingly well placed to serve
our customers' retirement needs and create further customer and shareholder
value as we fulfil our vision to become the UK's leading retirement savings
and income business. We've strengthened our balance sheet and continued to
invest in our market-leading Pensions and Savings and Retirement Solutions
businesses. Our strategic delivery includes moving ahead with our advice
proposition and in-housing the management of annuity-backing assets to benefit
from our scaled asset management capabilities. We support c.12 million
customers in managing over £295 billion in assets under administration.
Changing our name from Phoenix Group Holdings plc to Standard Life plc in
March 2026 brings our most trusted brand to the forefront and demonstrates our
commitment to helping customers secure a better retirement."
Andy Briggs, Group Chief Executive Officer
Strong H1 2025 financial performance
30 June 2025 Comparative %
change
Operating Cash Generation(1) £705m (H1 2024: £647m) +9%
Total cash generation(2) £784m (H1 2024: £950m) -17%
Shareholder Capital Coverage Ratio(3) 175% (FY 2024: 172%) +3pp
Solvency II ('SII') surplus £3.6bn (FY 2024: £3.5bn) +2%
SII leverage ratio(4) 34% (FY 2024: 36%) -2pp
IFRS adjusted operating profit £451m (H1 2024: £360m) +25%
Cumulative annual run-rate cost savings delivered £100m (FY 2024: £63m) N/A
IFRS loss after tax £(156)m (H1 2024: £(646)m) +76%
IFRS adjusted shareholders' equity £3,443m (FY 2024: £3,656m -6%
2025 Interim dividend 27.35pps (H1 2024: 26.65pps) +2.6%
Continued operating momentum in core businesses
Pensions and Savings: successfully growing our capital-light fee-based
business
· 20% IFRS adjusted operating profit growth to £179m
· 5% growth in average assets under administration ('AUA') to £187.9bn
· 2bps improvement in margin to 19bps driven by cost efficiencies
· Workplace net inflows of £2.8bn (H1 2024: £3.3bn) comprised £4.9bn
gross inflows; H1 2024 included a £0.9bn one-off bulk win; solid pipeline for
H2
· Retail net outflows improved to £4.4bn (H1 2024: £4.6bn) reflecting
retail strategy green shoots
Retirement Solutions: strong growth in operating profit and solid pipeline for
H2
· 36% IFRS adjusted operating profit growth in our capital-utilising
spread-based business to £286m, reflecting higher portfolio enhancement
actions and cost discipline
· Group CSM (gross of tax) grew 10% to £3,567m (FY 2024: £3,257m)
· £0.3bn BPA volumes written in HY 2025 reflecting selective pricing
in a competitive market
· £3.2bn BPA volumes completed and exclusive on year to date at c.3%
capital strain(5) and our largest ever deal of £1.9bn completed in July.
· £0.6bn individual annuity premiums written (HY 2024: £0.5bn)
· Continue to expect to deploy up to c.£200m of capital into annuities
in 2025
Progress across all strategic priorities
Grow: meeting more of our existing customer needs and acquiring new ones
· Progressed customer engagement tools
o Received FCA approval for our own in-house Retail advice proposition, a
key milestone and enables imminent launch
o Launched Annuity Desk for Standard Life customers to support a digital
customer experience
· Enhanced product build-out
o Completed our portfolio of innovative retirement income solution
products with the launch of the Guaranteed Lifetime Income plan
o Innovated BPA solutions through longevity insurance novations making our
BPA proposition more attractive to customers
Optimise: optimising our in-force business and balance sheet
· Evolving management of our annuity-backing assets to a predominantly
in-house model by leveraging our scaled asset management capabilities to
optimise customer outcomes and enhance returns
o We are now managing £5bn of our £39bn annuities portfolio in-house,
and are currently preparing to in-house a further c.£20bn
o Underpins our ability to deliver recurring management actions and
delivers cost savings
· Excess cash generation has enabled further deleveraging
o $250m debt repaid in February
o £294m recurring management actions delivered in HY 2025 (HY 2024:
£264m)
Enhance: transforming our operating model and culture
· Cumulative cost savings increased to £100m with FY2025 expectations
of c.£160m, reflecting a £35m acceleration
o Progressing our migrations to TCS BaNCS platform; 0.8m policies migrated
in HY 2025
o Entered into strategic partnership with Wipro to manage 1.9m
policies
Outlook
· Firmly on track to deliver all our financial targets which support
our progressive and sustainable dividend policy(6)
· Continued execution on strategic priorities, with a focus on customer
engagement
· Move to Standard Life plc in March 2026 brings our most trusted brand
to the forefront and supports our organic growth strategy
Firmly on track across all financial targets
Financial target Progress to date
Cash · Mid-single digit percentage growth p.a. in Operating Cash On track · 9% growth year-on-year in HY 2025
Generation(1)
· Total cash generation(2) 3-year target of £5.1 billion across On track · 50% achieved / £2.6 billion achieved
2024-26
Capital · Operate within our 140-180% Shareholder Capital Coverage Ratio(3) On track · 175% at end of HY2025
operating range
· SII leverage ratio(4) of c.30% by the end of 2026 On track · 2% point improvement to 34% in HY 2025
Earnings · c.£1.1 billion of IFRS adjusted operating profit in 2026 On track · 25% growth year-on-year in HY 2025
· £250 million of annual run-rate cost savings by the end of 2026 On track · £100 million run-rate savings achieved
H1 2025 financial summary
Financial performance metrics: 30 June 30 June YoY
2025 2024 change
Cash Operating Cash Generation(1) £705m £647m +9%
Of which recurring management actions £294m £264m +11%
Total cash generation(2) £784m £950m -17%
IFRS Adjusted operating profit £451m £360m +25%
Of which Pensions and Savings £179m £149m +20%
Of which Retirement Solutions £286m £210m +36%
Of which Europe and Other £41m £50m -18%
Of which With-Profits £4m £3m +33%
Of which Corporate Centre £(59)m £(52)m -13%
Adjusted operating profit margin (annualised)
Pensions and Savings 19bps 17bps +2bps
Retirement Solutions 145bps 109bps +36bps
Loss after tax £(156)m £(646)m +76%
Dividend Interim dividend per share 27.35p 26.65p +2.6%
Balance sheet metrics: 30 June 31 December 2024 6-mth change
2025
Solvency II capital PGH Solvency II surplus £3.6bn £3.5bn +2%
PGH Shareholder Capital Coverage Ratio(3) 175% 172% +3%pts
Leverage Solvency II leverage ratio(4) 34% 36% -2%pt
IFRS Shareholders' equity £768m £1,213bn -37%
Gross Contractual Service Margin £3,567m £3,257m +10%
Adjusted shareholders' equity £3,443m £3,656m -6%
Assets Assets under administration £295bn £292bn +1%
Group Chief Executive Officer's report
On track with our 3-year strategy
Phoenix Group manages c.£295 billion of assets under administration ('AUA')
for c.12 million customers. Our purpose of 'helping people secure a life of
possibilities' is embedded in everything that we do as we help customers
journey to and through retirement.
In March 2024 we set out our 3-year strategy, to realise our vision to become
the UK's leading retirement savings and income business. Progress towards
achieving our vision is delivered through executing against our strategic
priorities of Grow, Optimise and Enhance. We are building a sustainable and
growing business, which delivers growing cash, capital and earnings, which in
turn underpins our progressive and sustainable dividend with excess cash
generated creating additional financial flexibility.
We are now halfway through our 3-year strategy and I am delighted with the
progress. We have consistently executed against our strategic priorities, and
we are seeing our businesses winning in their markets, and growing
organically. We are firmly on track for all our financial targets.
I'm particularly pleased that this set of results evidences that the balance
sheet pivot is beginning to show, as reflected in improved Solvency II balance
sheet metrics, driven by the growth of the businesses post investment.
I am also energised by the opportunities ahead of us to meet more of our
customers' needs, and we are uniquely positioned to capture the momentum, in
our structurally growing markets.
Alongside our HY 2025 results, we are also announcing that we will change our
Group name from Phoenix Group Holdings plc to Standard Life plc in March 2026.
This move brings our most trusted brand to the forefront and demonstrates our
commitment to helping customers secure a better retirement. The move aligns
our brand strategy with our Group strategy, helping with our objective to
simplify our business. It unifies our colleagues and strengthens our employer
brand. It also reduces duplication and costs, and it supports our organic
growth strategy.
Executing on our strategic priorities
To Grow we need to have a full suite of products which meet the needs of our
customers, and build out our ability to engage with them. We received approval
from the FCA in August for our in-house advice proposition which will launch
later this year, further enhancing our Pensions and Savings business.
Separately, in Retirement Solutions, the launch in March of the Standard
Life Guaranteed Lifetime Income plan with Fidelity International means we now
have a full range of savings and retirement products. Both are a key step in
unlocking the Retail market where we are now focused on connecting these
products and propositions onto the right adviser platforms and into the right
direct channels.
To Optimise our scale in-force business and our balance sheet we have been
evolving the asset management strategy of our annuity-backing assets towards
an in-house model. This underpins our ability to deliver recurring management
actions and creates cost savings. Together these contribute to the excess cash
generation we are consistently achieving and in turn enabled us to repay debt
to support our deleveraging programme.
Under Enhance, our priority is to transform our operating model and culture
which in turn helps us to deliver better customer outcomes. A large aspect of
this is completing the migration of customer administration to modern,
technology-enabled platforms. With a further 0.8 million policies migrated
onto the TCS BaNCS platform in the first half and an additional 1.9 million
policies scheduled to be managed by Wipro under a new strategic partnership,
we have delivered an acceleration in our cost savings run-rate and are
simplifying our operating model.
A huge, structurally growing market with regulatory and political tailwinds
The UK long-term savings and retirement market is already large, with c.£3.6
trillion of total stock(7), but it is also structurally growing, with annual
flows of c.£280-300 billion(8) across our key markets of Workplace, Retail
and Annuities. These flows are driven by the current demographic and
socio-economic trends which has seen increasing responsibility for retirement
falling on individuals rather than employers as was previously the case.
With only 14% of people on track for the retirement they require(9), we
continue to advocate for the changes that will make the biggest difference to
our customers, and in this regard I am really encouraged by recent regulatory
and political proposals that will support better retirement outcomes.
Raising savings levels through an increase in auto-enrolment contribution
rates and a focus on value for money through consolidation and pensions
dashboards will also help close the pension savings gap. With only 10% of the
population currently paying for financial advice(10), the introduction of
Targeted Support by the FCA has the potential to materially help customers
make better financial decisions. The Mansion House Accord is a reflection of
the continuing industry-led efforts to improve retirement outcomes and in
parallel unlock long-term investment in UK growth.
We are well positioned to benefit from these tailwinds that will accelerate
the existing structural growth opportunities. As a top three player in
workplace, we are already well in excess of the £25 billion minimum scale
threshold requirement for default funds, as set out in the Government's
Pensions Scheme Bill. So we are ready to take on business from schemes who
need a secure provider or who may struggle to meet some of the enhanced
requirements within the Bill.
Phoenix is well-positioned to win share
Phoenix is well-positioned to win share in the growing Workplace, Retail and
Annuities markets, underpinned by our three competitive advantages of customer
engagement, capital and cost efficiency.
With 1 in 5 UK adults being customers of Phoenix we have an exceptional level
of customer access. This gives us insights into what customers - both
corporate and consumers - really need, which in turn supports how we develop
and design propositions.
Our breadth of products means we can support customers not just when they are
saving for retirement, but also when they are looking to transition to and
secure income in retirement. Offering excellent service is key to winning too.
Our ability to succeed here is underpinned by our strong digital capabilities
such as our market leading app and by providing the tools our customers' need
to empower them to make smarter financial decisions, and there is more for us
to do.
We also benefit from capital efficiency from our diversified long-term savings
and retirement businesses, comprising both capital-light fee-based and
capital-utilising spread-based products.
Our existing cost efficiencies, underpinned by our c.12 million customer base
have been achieved by leveraging technology across our business, and will
increase further through our cost savings programme.
In parallel, our capital and cost efficiencies mean we can offer our products
at competitive prices whilst maintaining attractive margins.
Pensions and Savings: successfully growing our capital-light fee-based business
Our capital-light fee-based Pensions and Savings propositions, comprising
Workplace and Retail, help customers journey to and through retirement.
Testament to the strength of our Workplace proposition and specifically our
Master Trust offering, is the fact we were the first provider to win the
Master Trust treble across Corporate Adviser, the Pensions Age and the
Professional Pensions awards. Given Master Trust continues to be the fastest
growing area of the workplace market, I am particularly proud of this
achievement.
From a product perspective, in the first half we widened the availability of
Standard Life drawdown products to ReAssure customers to support our desire to
meet more of our existing customer needs. We also continued to embed
sustainable investing principles to improve financial outcomes across our core
investment range including the Sustainable Multi Asset default with the
successful adoption of 'Sustainability Improvers' labelling across equities
and corporate bonds for £35 billion AUA.
We now have a full range of savings and retirement products so our focus is on
continuing to improve engagement. Our soon to be launched Retail advice
proposition will be a key enabler on this journey. As we start to roll out
trusted, in-house advice, we'll provide customers with a compelling reason to
stay with Standard Life. To be clear, we'll start small here and scale over
time.
To support our excellent digital-first member engagement, Standard Life
completed its connection to the pension dashboard ecosystem. Separately, in
partnership with Life Moments we launched Family Finance Hub, a new digital
coaching platform designed to help families navigate key financial moments
with confidence and clarity.
We continue to improve our Pensions and Savings profitability through growing
our AUA and enhancing our operating margin through improved cost efficiency.
This has supported increased IFRS adjusted operating profit of £179 million
in the first half (HY 2024: £149 million). In terms of flows, Workplace saw
£2.8bn net inflows, slightly lower year-on-year owing to the lumpy nature of
bulk scheme wins, and the second half pipeline is solid. Retail net outflows
improved to £4.4bn reflecting green shoots of our strategy.
Retirement Solutions: strong growth in operating profit and solid pipeline for H2
Our capital-utilising spread-based Retirement Solutions business, comprising
Bulk Purchase Annuity ('BPA') and Individual annuities, help customers secure
income certainty in retirement. Our strategy is based on disciplined capital
deployment, with up to c.£200 million allocated per annum.
Alongside the launch of the Standard Life Guaranteed Lifetime Income plan
product we've continued to enhance our BPA offering. This included
leveraging our extensive novation experience, to support schemes with
existing longevity insurance into BPA transactions. This means we have the
expertise to help customers with their broad range of requirements. This,
amongst other innovations, enabled us to complete our largest ever BPA deal in
July worth £1.9bn.
To further enhance our digital experience for individual annuity customers in
May we launched the UK's first fully digital, signature-free, annuity
application process which is fully integrated with a number of key portals.
This follows the launch of Annuity Desk for Standard Life customers, which
provides customers with a seamless, personalised journey when exploring
annuity options.
Annuity volumes of £0.8 billion in the first half were lower year-on-year due
to current BPA market dynamics and our continued discipline. We have completed
and are exclusive on an additional £2.9 billion BPA premiums since the period
end reflecting a solid pipeline for the second half. We delivered strong
ongoing Contractual Service Margin ('CSM') growth in the first half, with
Group CSM up 10%, and a 36% increase in IFRS adjusted operating profit to
£286 million (HY 2024: £210 million).
Evolving our approach to asset management to deliver better customer outcomes
To optimise customer outcomes and enhance returns we have been evolving our
approach to asset management. Historically we have operated an out-sourced
operating model for all assets, partnering with the best asset manager in each
asset class that we operate across.
For our Pensions and Savings business, which represents the majority of our
AUA, this strategy is unchanged. Moving forward we expect to consolidate the
number of asset managers we partner with, with Aberdeen continuing to be our
key asset management strategic partner into the future, and potentially
attracting a greater share of these assets.
As signalled in March, our strategy for the management of our annuity-backing
assets is evolving to one which is predominantly in-house, leveraging the
internal capabilities we have built to manage derivatives, public credit and
private assets alongside partnerships to source differentiated and unique
private assets. We are now managing £5 billion of our £39 billion
portfolio in-house, and are currently preparing to in-house a further c.£20
billion.
The shift to this in-housing model covers our annuity-backing assets. We have
no intention of becoming a fully-fledged asset manager nor are we looking to
manage third party assets.
We're excited about the benefits this brings by underpinning the delivery of
annuity portfolio re-optimisation management actions and greater cost
efficiency.
Firmly on track for all our financial targets
Consistently executing on each of our strategic priorities is translating
directly into the delivery of attractive financial outcomes. Our first half
performance has been strong across our financial framework of cash, capital
and earnings and we are firmly on track to deliver all of our targets.
Operating Cash Generation ('OCG') continues to be the metric which best
demonstrates the long-term underlying value generation from our business. OCG
grew by 9% in the period to £705 million (HY 2024: £647 million). We
continue to expect mid-single digit percentage growth per annum in OCG. This
level of cash generation not only means that our dividend is well covered, and
secure but also increases our financial flexibility, as we are generating at
least £300 million of excess cash per annum after financing our recurring
capital uses. We will deploy this excess in accordance with our capital
allocation framework, with our immediate focus being deleveraging.
Please see more detail in our Business Review.
H2 2025 priorities
Looking forward, we expect the second half of 2025 to be just as busy as the
first whilst we continue to execute against each of our strategic priorities.
I'm particularly excited about the imminent launch of our Retail advice
proposition and the launch of our Smooth Managed Fund on the Quilter platform
to support our ambitions in the Retail market and to build out our engagement
capabilities. |n parallel we will progress the shift to in-housing of our
annuity-backing assets and with strong operational and financial momentum in
the business that will support our deleveraging programme. Lastly, we will
migrate 1.1 million Standard Life policies to TCS BaNCS which is one of a
number of actions that will support us achieving our increased FY2025 annual
cost savings run-rate target of c.£160 million, up from £125 million as
previously indicated. At this point 75% of policies will be on their end state
platforms.
Summary
I continue to be delighted with the progress we are making against our
strategic priorities. We are winning in our markets, and we are growing as a
business. I am also pleased to see a stronger solvency balance sheet and to be
firmly on track to deliver all of our 2026 financial targets.
Looking ahead, I am optimistic. The UK retirement savings and income market is
huge and structurally growing and we are increasingly well placed to take
advantage of the attractive opportunities it presents and deliver strong
returns to our shareholders, supported by changing to Standard Life plc in
March 2026.
Thank you
Our performance is only achieved through the continued hard work and
dedication of our outstanding people. As we navigate this period of change
it has been a challenging environment for some, so I would like to thank each
and every one of my colleagues across the Group for their contributions.
Andy Briggs
Group Chief Executive Officer
Delivering cash, capital and earnings
H1 2025 financial summary
Financial performance metrics: 30 June 2025 30 June 2024 YOY change
Cash Operating Cash Generation(1) £705m £647m +9%
Total cash generation(1) £784m £950m -17%
IFRS Adjusted operating profit(1) £451m £360m +25%
Loss after tax attributable to owners £(156)m £(646)m +76%
Dividend Interim dividend per share 27.35p 26.65p +2.6%
Balance sheet metrics: 30 June 2025 31 December 2024 6-mth change
Solvency II capital PGH Solvency II surplus £3.6bn £3.5bn +2%
PGH Shareholder Capital Coverage Ratio(1) 175% 172% +3%pts
Solvency II leverage ratio(1) 34% 36% -2%pts
IFRS Shareholders' equity £768m £1,213m -37%
Contractual Service Margin (gross of tax) £3,567m £3,257m +10%
Adjusted shareholders' equity(1) £3,443m £3,656m -6%
Assets Assets under administration(1) £295bn £292bn +1%
1 Denotes metrics that are alternative performance measures
('APMs') - further information can be found in the Interim Financial Report.
Strong momentum towards our 2026 targets
We are halfway through executing our 3-year strategy and the results so far
are clear - our strong operating momentum has been carried into 2025 with
improvement across our core financial framework metrics, as demonstrated by
the growth in Operating Cash Generation ('OCG') (up 9%) and IFRS adjusted
operating profit (up 25%). Our strong operating performance reinforces our
ability to deliver sustainable cash generation and gives us improved financial
flexibility to support our strategic priorities. As a result, we are firmly on
track to deliver our 2026 financial targets across cash, capital and earnings.
Delivering our financial framework targets
In the first half of 2025, we delivered total cash generation of £784 million
and we have now generated over half of our 2024-26 cumulative £5.1 billion
total cash generation target.
Underpinning this is a strong 9% growth in OCG to £705 million, largely
driven by a higher contribution from recurring management actions of £294
million (H1 2024: £264 million) executed by our in-house asset management
team, and enabled by the investment into our Optimise strategic priority. We
therefore remain on track to deliver an annual mid-single digit OCG % growth
in 2025 and beyond. Importantly, OCG more than covered all of our recurring
cash uses including the dividend, which totalled £459 million in the period,
generating excess cash to deploy in line with our capital allocation
framework, currently focused on deleveraging.
Our capital position remains resilient with a Solvency II ('SII') surplus of
£3.6 billion as at 30 June 2025, £0.1 billion higher than our FY 2024
position, despite the planned redemption of $250 million (£200 million) of
Restricted Tier 1 notes in February. The improvement reflects £0.2 billion of
net recurring capital generation and a further £0.1 billion of net capital
generation from non-recurring sources.
Our strong operating performance means the Shareholder Capital Coverage Ratio
('SCCR') has improved to 175% and is towards the top-end of our 140-180%
operating target range.
We continue to demonstrate operational momentum, evidenced by a 25% increase
in IFRS adjusted operating profit to £451 million, with improved performances
reported in both of our main operating businesses, Pensions and Savings and
Retirement Solutions. This reflects the focus and investment across our Grow
and Enhance strategic priorities. Encouragingly, our IFRS adjusted operating
profit has covered a greater proportion of our recurring uses.
Our capital-light fee-based Pension and Savings business has reported a 20%
increase in IFRS adjusted operating profit, driven by higher revenue from a
growing asset base and lower expenditure.
Our capital-utilising spread-based Retirement Solutions business grew its IFRS
adjusted operating profit by 36% driven by a higher Contractual Service Margin
('CSM') release and higher combined investment margin and trading profits. We
wrote £0.8 billion of new annuity premiums reflecting the timing of Bulk
Purchase Annuity ('BPA') deals (H1 2025: £0.3 billion; H1 2024: £1.5
billion). We have since secured a further £2.9 billion of BPA premiums,
either completed or in exclusive negotiations.
We reported an IFRS statutory loss after tax of £156 million in the period
principally as a result of the adverse economic variances of £275 million,
predominantly driven by rising equity markets, which reflect the known
consequence of the Group's hedging programme.
As a reminder, our hedging programme aims to protect cash and Solvency II
capital from volatility in equities and interest rates in order to protect the
Group's ability to deliver a progressive and sustainable dividend. The hedging
covers components of the Solvency balance sheet which are not present under
IFRS, giving rise to accounting volatility. We continue to prioritise stable
SII surplus capital and predictable dividends, and accept the hedge-related
volatility in the IFRS result.
The CSM (gross of tax) rose by 10% to £3,567 million at 30 June 2025 (FY
2024: £3,257 million) driven by a £296 million contribution from strategic
projects, comprising the impact of the lower cost of managing the
annuity-backing assets which will be in-housed and the acceleration of net
expense benefits related to the Wipro strategic partnership.
Adjusted shareholders' equity stood at £3,443 million at 30 June 2025 (FY
2024: £3,656 million), which has reduced principally as a result of the loss
in the period.
Our SII leverage ratio has improved by 2%pts to 34% as at 30 June 2025 due to
the redemption of £200 million of debt in February. This drove a 1%pt
reduction in the leverage ratio, with a further 1%pt decrease due to growth in
Regulatory Own Funds during the period supported by net capital generative
actions. This reflects our focus on optimising our balance sheet in line with
our strategic priorities.
In accordance with our dividend policy, the Board has declared a 2025 Interim
dividend of 27.35 pence per share, which is in line with the 2024 Final
dividend. This equates to a 2.6% year-on-year increase.
Thank you
The strong performance that we have continued to deliver in the first half of
2025 has been achieved by the continued efforts of my colleagues across the
Group. I would therefore like to take this opportunity to thank them for their
contributions in 2025 thus far.
Nicolaos Nicandrou
Group Chief Financial Officer
Cash
£705m
Operating Cash Generation REM APM
£784m
Total cash generation REM APM
Phoenix Group holding companies' sources and uses of cash
£m H1 2025 H1 2024
Cash and cash equivalents at 1 January 1,117 1,012
Operating Cash Generation 705 647
Non-operating cash generation 79 303
Total cash generation(1) 784 950
Operating expenses (33) (56)
Debt interest (133) (138)
Shareholder dividend (274) (267)
Support of annuities activity (19) (36)
Total recurring uses of cash (459) (497)
Non-operating cash outflows (285) (185)
Closing cash and cash equivalents, pre-debt movements 1,157 1,280
Debt repayments (200) (643)
Debt issuance - 390
Closing cash and cash equivalents at 30 June 957 1,027
1 Includes £114 million received by the holding companies in respect of
tax losses surrendered (H1 2024: £28 million).
Operating Cash Generation ('OCG')
OCG represents the sustainable level of ongoing cash generation from our
underlying business operations that is remitted from our Life Companies to the
Group.
In the first half of 2025, OCG grew 9% to £705 million (H1 2024: £647
million). This was partly driven by an increase in surplus emergence to £411
million (H1 2024: £383 million), supported by the growing value of our
in-force business.
The remaining £294 million of OCG was generated through recurring management
actions (H1 2024: £264 million), a strong performance that means we are on
track to deliver an annual contribution of c.£500 million in 2025. The
majority of these actions were portfolio optimisation actions, contributing
£189 million (H1 2024: £184 million), with a further £105 million (H1 2024:
£80 million) from capital improvement and fund simplification actions.
Given the importance of this cash measure in tracking the Group's progress, we
intend to provide additional analysis of the drivers of OCG by business
segment at FY 2025. In H1 2025, Retirement Solutions generated c.£440 million
of OCG and Pensions and Savings generated c.£165 million. The remaining
c.£100 million of OCG was from Europe, With-Profits and Other.
Importantly, OCG of £705 million more than covered our recurring uses of cash
in the period of £459 million, which includes dividends, operating costs,
debt interest payments and annuities new business capital. The resulting £246
million of net recurring cash generation is flattered by the low level of
annuity strain in the first half, reflecting the timing of BPA deals. We
expect the full year net recurring cash generation to be at least in line with
the £0.3 billion reported in 2024.
Looking ahead to the full year, we remain on track to deliver annual
mid-single digit percentage rate growth in OCG, in line with our guidance,
which reflects a more even delivery across the half year periods compared to
2024.
Total cash generation
Total cash generation represents the total cash remitted from the operating
entities to the Group, comprising OCG, non-recurring management actions and
the release of free surplus above capital requirements in the Life Companies.
In addition to the OCG generated this year, £79 million of non-operating cash
generation was remitted in the period (H1 2024: £303 million). Total cash
remitted during the period was therefore £784 million (H1 2024: £950
million). The quantum of this non-operating component reflects the timing of
execution of capital actions, many of which were delivered after the
remittance from the Life Company subsidiaries.
Including the 2024 total cash generation of £1,779 million, we have
cumulatively delivered c.£2.6 billion, which is over half of our 2024-26
total cash generation target of £5.1 billion.
The 2024-26 total cash generation target is expected to exceed both our
expected recurring uses of c.£3.3 billion over this period and the planned
c.£0.7 billion investment in our business, and deliver excess cash of c.£1.1
billion.
In line with our capital allocation framework, the financial headroom created
by this excess cash will be primarily directed to deleveraging in order to
meet our c.30% SII leverage ratio target by the end of 2026. Some c.£450
million of debt has already been retired across 2024 and H1 2025.
Recurring uses of cash
Operating expenses reduced to £33 million (H1 2024: £56 million), in part
reflecting the timing of certain cash settlements as well as cost reductions.
Debt interest also declined to £133 million (H1 2024: £138 million) as we
reduce the level of debt on our balance sheet.
The £274 million shareholder dividend represents the payment of the 2024
Final dividend in May. This has increased year-on-year, from £267 million,
following the 2.6% increase announced with our FY 2024 results.
We have invested a more modest £19 million of capital into our annuities
business (H1 2024: £36 million) to support the writing of £0.8 billion of
new business annuity premiums in the year (H1 2024: £1.9 billion). In line
with current market dynamics, we anticipate BPA activity to increase in the
second half of 2025 and we have already written or are in an exclusive stage
for an additional £2.9 billion of BPA premiums since the end of June. We
remain focused on disciplined capital deployment in a competitive market.
Non-recurring uses of cash
Non-operating net cash outflows increased to £285 million (H1 2024: £185
million) primarily driven by £113 million of cash collateral outflows on
currency derivatives used to hedge non-sterling debt instruments, following
the depreciation of USD in the period. Non-operating costs also include £149
million (H1 2024: £164 million) of planned investment across our strategic
priorities.
The debt repayment of £200 million (H1 2024: £253 million net repayment)
represents the redemption of $250 million of Restricted Tier 1 notes in
February 2025, in support of the Group's deleveraging programme.
Capital
£3.6bn
Solvency II surplus REM
175%
Group Shareholder Capital Coverage Ratio APM
34%
Solvency II leverage ratio APM
Solvency II economic sensitivity analysis(1)
Surplus SCCR
(£bn) (%)
Solvency II base 3.6 175
Equities: 20% fall in markets - 5
Long-term rates: 100bps rise in interest rates - 5
Long-term rates: 100bps fall in interest rates - (4)
Long-term inflation: 50bps rise in inflation - (1)
Property: 12% fall in values (0.2) (5)
Credit spreads: 130bps widening with no allowance for downgrades (0.1) (1)
Credit downgrade: immediate full letter downgrade on 20% of portfolio(2) (0.3) (7)
Lapse: 10% increase/decrease in rates (0.2) (2)
Longevity: 6 months increase (0.4) (9)
1 Illustrative impacts assume changing one assumption on 1 July 2025,
while keeping others unchanged, and that there is no market recovery. They
should not be used to predict the impact of future events as this will not
fully capture the impact of economic or business changes. Given recent
volatile markets, we caution against extrapolating results as exposures are
not all linear.
2 Impact of an immediate full letter downgrade across 20% of the
shareholder exposure to the bond portfolio (e.g. from AAA to AA, AA to A,
etc.). This sensitivity assumes management actions are taken to rebalance the
annuity portfolio back to the original average credit rating and makes no
allowance for the spread widening which would be associated with a downgrade.
Group Solvency II capital position
Our SII capital position remains resilient, with a surplus of £3.6 billion
(FY 2024: £3.5 billion) and is stated after the accrual for the 2025 Interim
dividend. This has grown by £0.1 billion in the period, despite the
retirement of £200 million of debt in February, due to positive net recurring
capital generation and other non-recurring management actions outweighing
non-recurring uses in the period. Our SCCR increased 3%pts to 175% (FY 2024:
172%) and is towards the top-end of our target operating range of 140-180%.
Recurring capital generation
Net recurring SII capital generation totalled £0.2 billion in the first half
of 2025 (H1 2024: £0.1 billion), which increased the SCCR by 4%pts (H1 2024:
3%pts).
In-force business surplus emergence and release of capital requirements
contributed £0.4 billion to the SII surplus and 9%pts to the SCCR. We also
delivered recurring management actions of £0.3 billion, increasing the SCCR
by 6%pts, with the majority being Own Funds accretive as a result of portfolio
optimisation and other actions.
Operating costs, dividends and debt interest totalled £0.4 billion, reducing
the SCCR by 9%pts.
New business strain was negligible in the period and reduced the SCCR by
2%pts.
Non-recurring capital generation
Net non-recurring capital generation increased the SII surplus by £0.1
billion (H1 2024: £0.2 billion decrease) and the SCCR by 3%pts (H1 2024:
6%pts decrease). Other management actions generated £0.1 billion of surplus,
primarily driven by the benefits of evolving to the in-house management of our
annuity-backing assets. This action improves cost efficiency and strengthens
our ability to deliver long-term value to shareholders. Investment spend and
other primarily reflects our planned investment to grow, optimise and enhance
our business, partially offset by the Day 1 benefit from our decision to
appoint a new strategic partner, Wipro, that will assume the management of the
existing ReAssure platform ALPHA sooner than our previous plan.
We continue to be well hedged on an economic basis under Solvency II, with a
£0.1 billion SII capital adverse economic impact experienced from market
movements in the first half of 2025. The majority of the £0.1 billion adverse
economic impact relates to losses on currency derivatives used to hedge
non-sterling debt instruments, driven by USD depreciation.
Since this debt qualifies as Solvency II eligible capital (Own Funds neutral),
the valuation changes are not reflected in Own Funds. This temporary effect
will reverse upon debt maturity. The adverse economic impact was offset by a
£0.1 billion benefit relating to the unwind of the previous year's temporary
annuity strain, as we source assets to match prior year annuity transactions.
Life Companies Free Surplus
Free Surplus represents the SII surplus of the Life Companies that is in
excess of their Board-approved capital management policies. As at 30 June
2025, the Life Companies Free Surplus remained stable at £1.9 billion (FY
2024: £1.9 billion).
Leverage
SII leverage ratio has improved by 2%pts to 34% as at 30 June 2025 (FY 2024:
36%), driven by a 1%pt reduction from the $250 million debt repayment in
February, as well as a further 1%pt decrease from growth in Regulatory Own
Funds, supported by net capital generation actions.
We remain on track to achieve our c.30% SII leverage ratio target by the end
of 2026, albeit the path will not be linear.
Movement in Group SII capital during H1 2025
Recurring capital generation of Non-recurring capital generation of
+£0.2bn surplus and +4%pts SCCR
+£0.1bn surplus and +3%pts SCCR
£bn 2024 Surplus emergence and release Recurring management actions Operating costs, debt interest and dividends New business strain Other management actions Economics and temporary strain Investment spend and other H1 2025 Debt repayment H1
of SCR
(pre-debt repayment) 2025
Own Funds 8.4 0.3 0.3 (0.4) 0.0 0.1 0.0 (0.1) 8.6 (0.2) 8.4
SCR (4.9) 0.1 0.0 - (0.1) 0.0 (0.0) 0.1 (4.8) - (4.8)
SII surplus 3.5 0.4 0.3 (0.4) (0.0) 0.1 (0.0) (0.0) 3.8 (0.2) 3.6
SCCR(1) 172% 9% 6% (9)% (2)% 3% - - 179% (4)% 175%
Numbers may not sum due to rounding
(1) - The Shareholder Capital Coverage Ratio excludes SII Own Funds and
Solvency Capital Requirements ('SCR') of unsupported With-Profit funds and
unsupported pension schemes.
Earnings
£451m
IFRS adjusted operating profit REM APM
£3,567m
Contractual Service Margin (gross of tax)
£3,443m
IFRS adjusted shareholders' equity APM
IFRS income statement
£m H1 2025 H1 2024
Pensions and Savings 179 149
Retirement Solutions 286 210
Europe and Other 41 50
With-Profits 4 3
Corporate Centre (59) (52)
Adjusted operating profit 451 360
Amortisation and impairment of intangibles (116) (131)
Other non-operating items (184) (302)
Finance costs attributable to owners (97) (101)
Profit/(loss) before economics, tax and NCI 54 (174)
Economic variances (275) (698)
Loss before tax and NCI (221) (872)
Profit before tax attributable to non-controlling interest 12 10
Loss before tax attributable to owners (209) (862)
Tax credit attributable to owners 53 216
Loss after tax attributable to owners (156) (646)
IFRS adjusted operating profit
IFRS adjusted operating profit is an alternative performance measure ('APMs')
- further information can be found in the Interim Financial Report.
The Group generated a 25% year-on-year increase in IFRS adjusted operating
profit to £451 million (H1 2024: £360 million) driven by continued growth in
the contribution from both of our main operating businesses, Pensions and
Savings and Retirement Solutions.
Our Pensions and Savings business delivered 20% growth in IFRS adjusted
operating profit to £179 million (H1 2024: £149 million). This reflects the
benefit of growing our asset base, with average Assets under Administration
('AUA') increasing 5% year-on-year and driving year-on-year investment
contract revenue growth of 6%, combined with a reduction in the overall level
of investment contract and non-attributable expenses.
Workplace net inflows of £2.8bn (H1 2024: £3.3bn) were lower year-on-year
owing to bulk scheme wins, and the H2 pipeline is solid. Retail net outflows
improved to £4.4bn (H1 2024: £4.6bn). AUA growth in Pensions and Savings is
supported by higher equity markets, and is up to £189.7 billion in the period
(FY 2024: £186.5 billion). Based on average AUA, the IFRS adjusted operating
profit represents an operating profit margin of 19bps in H1 2025, 2bps higher
than both the H1 2024 and FY 2024 margin.
Our Retirement Solutions business reported IFRS adjusted operating profit of
£286 million (H1 2024: £210 million). The 36% year-on-year increase is
supported by a 25% increase in the CSM release to £91 million (H1 2024: £73
million) reflecting ongoing growth in our annuities book, and from higher
combined investment margin and trading profits of £201 million (H1 2024:
£154 million), reflecting portfolio management actions in the period. AUA in
Retirement Solutions benefited from £0.8 billion of gross annuity inflows,
lower than last year due to the timing of writing BPA new business. As a
result, gross inflows did not fully cover annuity payments during the period,
leading to a slight reduction in AUA to £38.8 billion (FY 2024: £40.3
billion). However, since the end of June we have secured a further £2.9
billion of BPA premiums, either completed or in exclusive negotiations.
Europe and Other IFRS adjusted operating profit decreased to £41 million (H1
2024: £50 million), primarily due to current period one-off experience.
With-Profits reported an IFRS adjusted operating profit of £4 million in line
with last year (H1 2024: £3 million profit).
The Group's Corporate Centre includes net operating costs of £59 million (H1
2024: £52 million). The increase is primarily due to lower investment income
on holding companies cash of £21 million (HY24: £27 million). This was
driven by a decline in short-term interest rates and lower average cash
holdings in the first half of this year, compared to H1 2024, reflecting the
debt repayments.
Looking ahead to the full year, we would expect a more even delivery of IFRS
adjusted operating profit across the half year periods compared to 2024.
IFRS loss after tax attributable to owners
The Group generated an IFRS loss after tax attributable to owners of £156
million (H1 2024: loss of £646 million). While we delivered a profit before
economics, tax and NCI of £54 million (HY24: loss of £174 million), the
statutory IFRS loss is primarily driven by £275 million of adverse hedging
related economic variances.
Economic variances
Adverse economic variances of £275 million (H1 2024: £698 million adverse)
reflected the result of the Group's hedging programme, which aims to protect
cash and SII capital from volatility in equities and interest rates.
In the first half of 2025, higher UK interest rates (15-year swap rates up
7bps) and higher equity markets (FTSE: +7.2%, S&P500: +5.5%), produced net
negative marks on the hedges, giving rise to the reported losses. In
comparison, H1 2024 experienced a larger adverse economic experience driven by
higher UK interest rates in the period (15-year swap rates up 56bps) with
higher equity markets experienced as well (FTSE: +5.6%, S&P500: +14.8%).
Amortisation and impairment of intangibles
The previously acquired in-force business, relating to IFRS 9 capital-light
fee-based business is being amortised in line with the expected run-off
profile of the investment contract profits to which it relates. Amortisation
during the period reduced to £116 million (H1 2024: £131 million) reflecting
the run-off of this acquired business. This accounting impact will continue to
reduce over time.
Other non-operating items
Other non-operating items totalled a loss of £184 million (H1 2024: £302
million loss), the majority of which reflects our planned investment spend
across our strategic priorities, with the balance reflecting the expected cost
of implementing the Wipro strategic partnership in so far as it relates to
investment contracts. The reduction year-on-year in other non-operating items
is largely due to H1 2024 having included a £106 million adverse impact from
the buy-out of our internal PGL Pension Scheme.
Finance costs
Finance costs of £97 million (H1 2024: £101 million) reflect interest borne
on the Group's debt instruments and is lower year-on-year due to the bond
redemptions completed in 2024 and early 2025 net of refinancing activities, in
support of the Group's deleveraging programme.
IFRS shareholders' equity and adjusted shareholders' equity
£m H1 2025 FY 2024 H1 2024(1)
Adjusted operating profit 451 825 360
Recurring uses:
Dividend (274) (533) (267)
Debt interest (97) (204) (101)
Amortisation of intangibles (116) (270) (131)
Adjusted operating profit before tax, less recurring uses (36) (182) (139)
Non-recurring uses, economics and tax:
Non-operating items (184) (520) (302)
Economic variances (275) (1,297) (698)
Tax and other items recognised in equity 50 470 278(1)
Movement in shareholders' equity (445) (1,529) (861)
Opening shareholders' equity 1,213 2,742 2,742
Movement in shareholders' equity (445) (1,529) (861)
Closing shareholders' equity 768 1,213 1,881(1)
CSM (net of tax) 2,675 2,443 2,350
Adjusted shareholders' equity 3,443 3,656 4,231(1)
1 The Group identified material corrections to previously reported
results that gave rise to a restatement of comparative information (see note 1
to the consolidated interim financial statements for further details.
Run-rate cost savings
The Group is targeting £250 million of annual run-rate cost savings, net of
inflation, by the end of 2026, as we enhance our business and move to a more
efficient Group-wide operating model. In the first half of 2025, the Group's
cost savings programme delivered £37 million of run-rate savings, which will
predominantly benefit our Pensions and Savings business. Including the savings
achieved in 2024, this brings our cumulative annual run-rate cost savings to
£100 million (of which £40 million has been earned in the period) and we
expect to reach c.£160 million of cumulative run-rate cost savings by the end
of 2025, some c.£35 million ahead of our previously announced plan. We
therefore remain on track to achieve our 2026 target.
Shareholders' equity and adjusted shareholders' equity
We made significant progress in 2024 towards increasing the level of pre-tax
IFRS adjusted operating profit to cover a greater proportion of our recurring
uses, and this progress continued into the first half of 2025.
As previously signposted, our non-operating items remain high at present, as
they are primarily driven by the impact of our planned 3-year non-recurring
investment spend on migrations and transformation programmes across 2024-26.
Our targeted IFRS adjusted operating profitability level of c.£1.1 billion in
2026 is expected to be sufficient to fully cover our recurring uses and create
excess to fund non-recurring uses.
As with the prior periods, the economic variances in H1 2025 reflect the
outcome of our hedging programme, which is designed to protect our cash and
SII capital, and supports our progressive and sustainable dividend policy. The
Board continues to prioritise stable SII surplus capital and predictable
dividends, and accepts the hedge-related volatility in the IFRS result.
The resulting IFRS loss after tax in the period drove shareholders' equity
lower at 30 June 2025 to £768 million (FY 2024: £1,213 million).
Adjusted shareholders' equity comprises IFRS shareholders' equity and the CSM
(net of tax), and stood at £3,443 million at 30 June 2025 (FY 2024: £3,656
million).
Contractual Service Margin ('CSM')
The Group's CSM (gross of tax) rose by 10% to £3,567 million at 30 June 2025
(FY 2024: £3,257 million) and represents a sizeable stock of value that will
unwind into IFRS adjusted operating profit in future years.
The increase in the period was driven by a £296 million contribution from
strategic projects, which comprises the impact of the lower cost of managing
our annuity-backing assets which will be in-housed and the acceleration of net
expense benefits related to the Wipro strategic partnership. An additional
£95 million was generated from assumption changes, experience, economics and
other items (H1 2024: £301 million).
The Group's CSM in H1 2024 benefitted from a one-off £87 million increase
related to the internal PGL Pension Scheme buy-out, and an £81 million
one-off benefit relating to modelling refinements and adjustments.
A further £24 million increase was driven by new business written in the
period (H1 2024: £92 million), with the lower year-on-year contribution
reflecting timing of BPA deals.
The H1 2025 CSM release into the income statement was 7.5% on an annualised
basis, broadly in line with the FY 2024 CSM release (8%), and contributed
£138 million to pre-tax adjusted operating profit (H1 2024: £144 million).
The net of tax value of the CSM increased to £2,675 million at 30 June 2025
(FY 2024: £2,443 million).
Movement in Group CSM during H1 2025, including segmental split
£m Opening New Interest accretion Assumption changes, experience, economics and other Strategic project initiatives Closing CSM, pre-release (gross) CSM Closing Tax Closing
business
CSM
CSM release CSM
(net)
(gross) (gross)
Retirement Solutions 2,306 7 28 94 271 2,706 (91) 2,615 (654) 1,961
Pensions and Savings 263 - - 23 10 296 (16) 280 (70) 210
Europe and Other 196 17 2 (2) 5 218 (18) 200 (50) 150
With-Profits 492 - 3 (20) 10 485 (13) 472 (118) 354
H1 2025 Total Group CSM 3,257 24 33 95 296 3,705 (138) 3,567 (892) 2,675
H1 2024 Total Group CSM(1) 2,853 92 32 301 - 3,278 (144) 3,134 (784) 2,350
FY 2024 Total Group CSM(2) 2,853 248 67 370 - 3,538 (281) 3,257 (814) 2,443
1 H1 2024 assumption changes, experience, economics and other includes
£87 million relating to the internal PGL Pension Scheme buy-out and £81
million relating to modelling refinements and adjustments.
2 FY 2024 assumption changes, experience, economics and other includes
£87 million relating to the internal PGL Pension Scheme buy-out and £71
million relating to modelling refinements and adjustments.
Dividend
27.35p
2025 Interim dividend
+2.6%
Year-on-year increase in Interim dividend
In accordance with our dividend policy, the Board will announce any
potential annual dividend increase alongside the Group's Full Year results and
expects the Interim dividend to be in line with the previous year's Final
dividend. The Board continues to prioritise the sustainability of our dividend
over the long term. Future dividends and annual increases will be subject to
the discretion of the Board, following assessment of longer-term
affordability.
In operating the policy and assessing longer-term affordability the Board
considers the quantum and trajectory of the Group's Operating Cash Generation,
SII surplus, Shareholder Capital Coverage Ratio and the distributable reserves
at the Group's holding company.
At 31 December 2024, distributable reserves at Phoenix Group Holdings plc, the
Group's holding company that pays dividends to shareholders, stood at £5,571
million, supported by sizeable distributions from its main operating
subsidiaries which continue to report under UK GAAP and carry significant
distributable reserves. In 2024 the Group's main operating subsidiaries
generated strong UK GAAP net profits after covering hedging, which supported
the cash remittances to Group.
In the consolidated IFRS financial statements, the Group is targeting a
positive pre-hedge post-dividend IFRS net profit contribution to the IFRS
shareholders' equity. The Group accepts the hedge-related volatility that
impacts IFRS shareholders' equity, which is a known consequence of our
Solvency II hedging strategy that is designed to protect our cash, capital and
dividend.
In this overall context and consistent with previous guidance, the Board
considers that the Group's consolidated IFRS shareholders' equity is not a
constraint to the payment of our dividends.
In line with our policy, the Board has declared a 2025 Interim dividend of
27.35 pence per share, equal to the 2024 Final dividend announced at the
Group's Full Year results in March.
The 2025 Interim dividend equates to a 2.6% year-on-year increase compared to
the 2024 Interim dividend, in line with the increase of our 2024 Final
dividend, which reflected the result of our improved operating performance in
2024 and our ongoing confidence in the Group's strategy.
Financial Targets
Phoenix Group's financial targets
Cash
· Mid-single digit percentage growth p.a. in Operating Cash
Generation
· Total cash generation 3-year target of £5.1 billion across
2024-26
Capital
· Operate within our 140-180% Shareholder Capital Coverage Ratio
operating range
· SII leverage ratio of c.30% by the end of 2026
Earnings
· c.£1.1 billion of IFRS adjusted operating profit in 2026
· £250 million of annual run-rate cost savings by the end of 2026
In March 2024 we reiterated our ambition to become the UK's leading retirement
savings and income business and set 3-year targets under our financial
framework of cash, capital and earnings, and were able to upgrade a number of
targets in March 2025.
We are now halfway into our 3-year strategy and have built clear momentum, and
despite a more volatile economic environment we are firmly on track to deliver
all of our 2026 targets.
Information required under the Disclosure Guidance & Transparency Rules
('DTR')
Information required to be communicated in unedited full text, in accordance
with DTR 6.3.5R(1A), is included in the Interim Report.
A copy of Phoenix Group Holdings plc's Interim Report for the period ended 30
June 2025 is available
at: http://www.rns-pdf.londonstockexchange.com/rns/3793Y_1-2025-9-7.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3793Y_1-2025-9-7.pdf)
In accordance with UK Listing Rule 6.4.1, a copy of the Interim Report has
been submitted to the National Storage Mechanism and will shortly be available
for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The document may also be accessed via the Phoenix Group website at:
https://www.thephoenixgroup.com/investors/results-reports-and-presentations/
(https://www.thephoenixgroup.com/investors/results-reports-and-presentations/)
Enquiries
Investors/analysts:
Claire Hawkins, Director of Corporate Affairs & Brand, Phoenix Group
+44 (0)20 4559 3161
Joanne Roberts, Investor Relations Director, Phoenix Group
+44 (0)20 4559 4673
Media:
Tom Blackwell, FTI Consulting
+44 (0)7515 597866
Shellie Wells, Corporate Communications Director, Phoenix Group
+44 (0)20 4559 3031
Presentation and webcast details
There will be a live virtual presentation for analysts and investors today
starting at 09:30 (BST). You can register for the live webcast at: Phoenix
Group 2025 half year results
(https://storm-virtual-uk.zoom.us/webinar/register/WN_n1bTivmGRqG65g44W6vlJw#/registration)
A copy of the presentation and a detailed financial supplement will be
available at:
https://www.thephoenixgroup.com/investors/results-reports-and-presentations/
(https://www.thephoenixgroup.com/investors/results-reports-and-presentations/)
A replay of the presentation and transcript will also be available on our
website following the event.
There will also be an additional Q&A event aimed at retail investors,
hosted by Andy Briggs, Group CEO, and Nicolaos Nicandrou, Group CFO, following
a replay of the Group's Investor Presentation, via Investor Meet Company on 11
September 2025, starting at 15:30 (BST).
The Investor Meet Company presentation and Q&A is open to all existing and
potential shareholders. Questions can be submitted pre-event via your Investor
Meet Company dashboard up until 10 September 2025, 09:00 (BST), or at any time
during the event.
Investors can sign up to Investor Meet Company for free and add to meet
Phoenix Group Holdings plc via:
https://www.investormeetcompany.com/phoenix-group-holdings-plc/register-investor
(https://www.investormeetcompany.com/phoenix-group-holdings-plc/register-investor)
Dividend details
The declared 2025 Interim dividend of 27.35 pence per share is expected to be
paid on 30 October 2025.
The ordinary shares will be quoted ex-dividend on the London Stock Exchange as
of 25 September 2025. The record date for eligibility for payment will be 26
September 2025.
Footnotes
1. Operating Cash Generation ('OCG') represents the sustainable level of ongoing
cash generation from our underlying business operations, that is remitted from
our Life Companies to the Group.
2. Total cash generation represents the total cash remitted from the operating
entities to the Group, comprising OCG, non-recurring management actions and
the release of free surplus above capital requirements in the Life Companies.
3. The Shareholder Capital Coverage Ratio excludes Solvency II Own Funds and
Solvency Capital Requirements of unsupported With-Profit funds and unsupported
pension schemes.
4. Solvency II leverage ratio calculation = debt (all debt including RT1) / SII
regulatory Own Funds. Ratio allows for currency hedges over foreign currency
denominated debt.
5. Annuity capital strain on a Post Capital Management Policy basis.
6. The Board will continue to prioritise the sustainability of our dividend over
the long term. Future dividends and annual increases will be subject to the
discretion of the Board, following assessment of longer-term affordability. At
31 December 2024, distributable reserves at Phoenix Group Holdings plc, the
Group's holding company that pays dividends to shareholders, stood at £5,571
million (FY 2023: £4,632 million), supported by sizeable distributions from
its main operating subsidiaries which continue to report under UK GAAP and
carry significant distributable reserves. In 2024 the Group's main operating
subsidiaries generated strong UK GAAP net profits after covering hedging,
which supported the cash remittances to Group. In the consolidated IFRS
financial statements, the Group is targeting a positive pre-hedge
post-dividend IFRS net profit contribution to the IFRS shareholders' equity.
The Group accepts the hedge-related volatility that impacts IFRS shareholders'
equity, which is a known consequence of our Solvency II hedging strategy that
is designed to protect our cash, capital and dividend. In this overall context
and consistent with previous guidance, the Board considers that the Group's
consolidated IFRS shareholders' equity is not a constraint to the payment of
our dividends.
7. The 2024 Purple Book and internal analysis of publicly available company
financial disclosures and latest market data
8. Broadridge, LCP, and internal analysis of publicly available company financial
disclosures and latest market data
9. https://www.thephoenixgroup.com/media/w4fiedid/phoenix-insights-great-expectations-report.pdf
(https://www.thephoenixgroup.com/media/w4fiedid/phoenix-insights-great-expectations-report.pdf)
10. What role could Targeted Support play in supporting consumers at retirement?
(https://www.standardlife.co.uk/centre-for-the-future-of-retirement/research-reports/article-page/what-role-could-targeted-support-play-in-supporting-consumers-at-retirement)
Disclaimers
This announcement in relation to Phoenix Group Holdings plc and its
subsidiaries (the 'Group') contains, and the Group may make other statements
(verbal or otherwise) containing, forward-looking statements and other
financial and/or statistical data about the Group's current plans, goals,
targets, ambitions, outlook, guidance and expectations relating to future
financial condition, performance, results, strategy and/or objectives.
Statements containing the words: 'believes', 'intends', 'will', 'may',
'should', 'expects', 'plans', 'aims', 'seeks', 'targets', 'continues' and
'anticipates' or other words of similar meaning are forward looking. Such
forward-looking statements and other financial and/or statistical data involve
known and unknown risks and uncertainty because they relate to future events
and circumstances that are beyond the Group's control. For example, certain
insurance risk disclosures are dependent on the Group's choices about
assumptions and models, which by their nature are estimates. As such, actual
future gains and losses could differ materially from those that the Group has
estimated.
Other factors which could cause actual results to differ materially from those
estimated by forward-looking statements include, but are not limited to:
domestic and global economic, political, social, environmental and business
conditions; asset prices; market-related risks such as fluctuations in
investment yields, interest rates and exchange rates, the potential for a
sustained low-interest rate or high interest rate environment, and the
performance of financial or credit markets generally; the regulations,
policies and actions of governmental and/or regulatory authorities including,
for example, climate change and the effect of the UK's version of the
'Solvency II' regulations on the Group's capital maintenance requirements;
developments in the UK's relationship with the European Union; the direct and
indirect consequences of the conflicts in Ukraine and the Middle East for
European and global macroeconomic conditions, and related or other
geopolitical conflicts; political uncertainty and instability including the
rise in protectionist measures; the impact of changing inflation rates
(including high inflation) and/or deflation; information technology (including
Artificial Intelligence) or data security breaches (including the Group being
subject to cyber-attacks); the development of standards and interpretations
including evolving practices in sustainability and climate reporting with
regard to the interpretation and application of accounting; the limitation of
climate scenario analysis and the models that analyse them; lack of
transparency and comparability of climate-related forward-looking
methodologies; climate change and a transition to a low-carbon economy
(including the risk that the Group may not achieve its targets); the Group's
ability along with governments and other stakeholders to measure, manage and
mitigate the impacts of climate change effectively; market competition;
changes in assumptions in pricing and reserving for insurance business
(particularly with regard to mortality and morbidity trends, gender pricing
and lapse rates); the timing, impact and other uncertainties of any
acquisitions, disposals or other strategic transactions; risks associated with
arrangements with third parties; inability of reinsurers to meet obligations
or unavailability of reinsurance coverage; and the impact of changes in
capital, and implementing changes in IFRS 17 or any other regulatory, solvency
and/or accounting standards, and tax and other legislation and regulations in
the jurisdictions in which members of the Group operate.
As a result, the Group's actual future financial condition, performance and
results may differ materially from the plans, goals, targets, ambitions,
outlook, guidance and expectations set out in the forward-looking statements
and other financial and/or statistical data within this announcement. The
information in this announcement does not constitute an offer to sell or an
invitation to buy securities in Phoenix Group Holdings plc or an invitation or
inducement to engage in any other investment activities. The Group undertakes
no obligation to update any of the forward-looking statements or data
contained within this announcement or any other forward-looking statements or
data it may make or publish. Nothing in this announcement constitutes, nor
should it be construed as, a profit forecast or estimate. No representation is
made that any of these statements will come to pass or that any future results
will be achieved. As a result, you are cautioned not to place undue reliance
on such forward-looking statements contained in this announcement.
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