CORRECTED UPDATE 1-Standard Life cheers changing UK retirement landscape

Wed Apr 30, 2014 5:02am EDT

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(Corrects in seventh paragraph to show UK workers have option to opt out of auto-enrolment)

By Chris Vellacott

LONDON, April 30 (Reuters) - British financial services group Standard Life plc said the automatic enrolment of UK workers on to company pension schemes was helping boost its assets, though analysts said inflows were relatively modest.

In a trading statement on Wednesday, Standard Life said its assets under administration rose 1.5 percent in the first quarter of the year to 247.8 billion pounds ($417.43 billion), driven by net inflows of 2.4 billion pounds.

Though growth in assets was positive and in line with forecasts, analysts at Bernstein Research said it was "subdued" because of a tough comparison with a strong start to 2013.

Standard Life shares dropped around 3 percent in early trade.

Chief Executive David Nish said 60,000 new customers started saving for their retirement through 285 auto enrolment schemes set up for companies by Standard Life during the quarter.

"We continue to benefit from having positioned our business well for regulatory changes," he said on a conference call with journalists.

Britain's government made enrolment on to company pension schemes automatic for the country's workers last year, leaving them the option to opt out.

Nish also said the group welcomed a move by the government to liberalise how retirees use their pension pots, even though the move prompted a 50 percent fall in sales of Standard Life's annuities after it was announced in March.

The reforms mean retirees will no longer be forced to buy an annuity on retirement and will be free to invest their pension pots as they see fit.

"We see the changes as a significant opportunity to address the UK's long-term savings challenge making savings more attractive," he said.

Nish said the impact on Standard Life's earnings would be limited because annuities accounted for only 6 percent of the group's operating profit in 2013.

He said the long-term impact of the reforms remained difficult to predict.

"It will be some time before we understand the long-term trends," he told a conference call on Wednesday.

Standard Life recently sought to boost the size of its fund management arm with the acquisition announced in March of Ignis Asset Management from insurer Phoenix Group.

The funds unit Standard Life Investments saw a 2.3 percent increase in the assets it manages for external clients during the quarter, bringing the total to 189 billion pounds.

($1 = 0.5936 British Pounds) (Reporting by Chris Vellacott; Editing by John Stonestreet)

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