Laura Mason: Building a seamless savings through to retirement journey
L&G has announced its total defined contribution (DC) assets under management (AUM) has surpassed £200bn.
The financial services provider said more than half of its assets under administration are across its workplace DC schemes, which surpassed £100bn earlier this year and service around 5.7 million members. This includes assets in the L&G Mastertrust, which announced its £30bn milestone in January.
L&G said its workplace DC business recorded net flows up 21% to £4bn at half year – adding that it was targeting cumulative net flows of £40-50bn by 2028.
Over the past 18 months, L&G has launched a range of DC initiatives.
In 2024, L&G launched its Private Markets Access Fund (PMAF), a fund which has to date attracted £1.6bn in assets. At the same time, the provider also launched its Lifetime Advantage Funds, a ‘to and through' target date fund range, which includes an allocation to PMAF.
In February this year, L&G launched its guided retirement planner, to offer people aged 55 or over a tailored view of their pensions, savings and investments in a bid to help them create a personalised retirement income plan. L&G said early usage had "exceeded expectations", with higher-than-anticipated engagement and action even before full rollout.
It said nearly 70,000 members from this group had already begun their guided retirement planner journey – with the provider reporting a 50% reduction in members facing retirement shortfalls after adjusting their plans, adding that one in three members using the planner had created a full retirement plan and strategy while some 20% had taken a "significant action", such as deciding to consolidate, enter drawdown or purchase an annuity, as a result.
Commenting on the AUM milestone, L&G chief executive of retail Laura Mason said: "As the growth of DC accelerates, our scale positions us to deliver long-term value. This £200bn milestone reflects the trust placed in us and we're seizing the opportunity to be a lifetime savings partner; supporting sustainable retirement outcomes and driving positive impact for clients, members, and society. We look forward to building on this commercial momentum and continuing to deliver value for customers."
L&G chief executive for asset management Eric Adler added: "Reaching £200bn in DC assets is a landmark achievement that highlights the strength of our investment capabilities and the trust placed in us as responsible custodians of our clients' pension capital. By combining scale, innovation and diversified asset management solutions, we are uniquely positioned to help shape better retirement outcomes for millions while supporting the UK's economic growth."
More to come
Speaking to Professional Pensions, Mason said a combination of things had driven the increase in business, notably the build-up in workplace contributions following the launch of auto-enrolment in 2012, but felt there was "even more to come".
She said the really exciting but for L&G was around the current changes in pensions such as the Pensions Review, the Pension Schemes Bill and a range of regulatory initiatives.
Mason said: "I think this is really going to enable a different type of interaction with our end customers and members."
She said targeted support was particularly important for L&G in terms of how it engages its members to really start to think about their futures and proactively manage their savings in a way she said the industry "probably hasn't made as easy as perhaps it could have done" in the past.
Mason said the combination of this regulatory change along with the increasing scale enabled it to invest in and build its digital offering much further – innovation and investment it had demonstrated with the launch of its guided retirement planner and ongoing enhancements to things like its workplace pensions app.
The firm has also made some key appointments to boost the way in which it engages with its customers – including the promotion of Paula Llewellyn to the role of chief executive for DC & workplace savings in April.
Mason said this focus on engagement mirrored the growing interest seen among its workplace clients.
She said: "Corporates are now much more interested in this as a benefit for their employees. There's an increasing feeling that they need to make a bigger deal of this and become much more interested in what that is doing for their employees."
A seamless savings journey
Ultimately, Mason says her key priority is how L&G moves to a position where its end customers can have a "seamless savings through to retirement journey".
She notes L&G has a customer population that is quite representative – adding that L&G's members were facing the same "advice gap" challenges of accessing and paying for advice as the UK population as a whole.
Mason explained the firm is now very much focused on how to engage people in a really easy way digitally – allowing them to do as much as possible digitally, with human advice (L&G also has an advice service) as a backup.
She said: "That's our end goal and we are very much building that."
