Phoenix Group (LON:PHNX) said its Standard Life business delivered higher operating cash generation and operating profit in the first half of 2026, while advancing plans to acquire Aegon UK and establish a new pension risk transfer, or PRT, partnership.
Group Chief Executive Officer Andy Briggs said the company was in the final stages of its three-year strategy and had already met some of its end-2026 objectives. He said Standard Life is seeking to become the U.K.’s leading retirement savings and income business, supported by its workplace pensions, retail savings and annuities operations.
Cash generation, profit and dividend rise
Group Chief Financial Officer Nicolaos Nicandrou reported operating cash generation of £745 million for the first half, a 6% increase from a year earlier and in line with the company’s mid-single-digit growth guidance. Total cash generation was £900 million.
Adjusted IFRS operating profit rose 25% to £563 million, supported by asset growth, cost savings and higher investment margins. The company said it remains on track to reach its £1.1 billion operating profit target for 2026.
- Pensions and savings operating profit increased 36% to £244 million.
- Retirement solutions operating profit rose 13% to £324 million.
- Combined assets under administration in pensions and savings reached £226 billion, up 7% year to date.
- Standard Life’s retirement solutions business managed more than £40 billion of annuity assets.
The company declared an interim dividend of 28.05 pence per share, up 2.6% year over year. Briggs said total dividend payments during the current strategic phase would reach £1.4 billion.
Standard Life’s shareholder solvency coverage ratio was 169% at June 30, remaining in the upper half of its operating range after the company redeemed £500 million of debt in June. Its leverage ratio improved to 29%, achieving its 30% target ahead of schedule.
Nicandrou said the company expects the shareholder solvency ratio to rebound in the second half now that the debt-reduction program has been completed. He also said the group regulatory Solvency II ratio was 146% at the half-year point, compared with 153% at the end of 2025.
Workplace wins and retail retention efforts
Standard Life secured £6.2 billion of workplace pension scheme wins during the first half, including its largest-ever win. Most of those mandates are expected to begin in early 2027. The company compared the figure with £1.5 billion of scheme wins for all of 2025.
Workplace gross inflows totaled £4.9 billion, including £800 million from new schemes, while regular gross inflows excluding new schemes were £4.1 billion. Briggs said the company retained 99.8% of workplace clients and increased its workplace net promoter score by four points to 64.
Retail gross inflows increased 9% year over year to £3.6 billion, aided by International Bonds and retention initiatives. However, retail gross outflows remained £7.3 billion. Briggs said roughly one-third of retail outflows represented customers taking retirement income, while around two-thirds reflected transfers to competitors.
He said the company’s central retail opportunity is to engage more proactively with customers, particularly those aged over 50 who hold multiple pension pots. Standard Life plans to launch its first targeted support proposition near the end of 2026 and expand its advice offering into inheritance-tax planning.
Briggs also cited investments in customer data, Salesforce customer relationship management systems and digital engagement tools. Standard Life’s retail net promoter score rose six points to 61, while 95% of advice customers rated the service as good or excellent value, according to the company.
Annuities growth and PRT partnership
In retirement solutions, new individual annuity premiums rose 8% to £600 million, with open-market premiums up 14%. PRT premiums totaled £1.6 billion in the first half, with a further £400 million completed or at an exclusive stage after June 30.
The company said it was actively quoting on an approximately £7 billion PRT pipeline. Briggs said the PRT market had become more competitive, and Nicandrou said new-business returns were expected to be lower in the second half amid low credit spreads and competitive pricing.
Still, Standard Life said its annuity business generated lifetime internal rates of return above 20% in the first half. Retirement solutions operating cash generation rose 5% to £466 million, with an annual spread-based margin of 222 basis points on average assets under administration of £42 billion.
Standard Life plans to broaden its PRT reach through a partnership expected to launch in the first half of 2027, subject to regulatory approvals. The partnership is designed to serve larger defined-benefit pension schemes above £2 billion in size and involves CVC, Prudential Financial, Goldman Sachs and MS&AD.
Briggs said the arrangement could generate £5 billion to £7 billion of incremental annual business over time. Standard Life expects to contribute £500 million of capital over five years from annual excess cash generation, as part of a partnership with up to £2 billion of total capital.
Aegon UK acquisition and cost program
The company also continued preparations for its £2 billion acquisition of Aegon UK, which is expected to complete around year-end, subject to regulatory approval. Briggs said the transaction would expand Standard Life’s workplace and retail capabilities, add products including ISAs and general investment accounts, and strengthen its financial advice and adviser-platform offerings.
Standard Life expects to generate £800 million of net synergies and add £400 million of excess cash over the first five years following the acquisition. Nicandrou said Aegon UK is expected to contribute more than £160 million of operating cash generation and that the group plans to target £110 million of cost savings from the acquired business.
Separately, Standard Life reported cumulative run-rate cost savings of £210 million at the end of June, leaving £40 million to reach its £250 million end-2026 target. Nicandrou said the savings came from platform migrations and business simplification, with technology and artificial intelligence also contributing to a more scalable operating model.
Looking ahead, management said it would provide a high-level update on post-2026 strategy, financial guidance and planned uses of excess cash in November.
About Phoenix Group (LON:PHNX)
Phoenix Group is one of the UK’s largest long-term savings and retirement businesses with over £290 billion of assets under administration and c. 12 million customers. We were founded in 1782 and are based in London, UK, and our family of brands include Standard Life, SunLife and ReAssure. We are a constituent of the FTSE 100 with c. 6,600 colleagues and offer a broad range of savings and retirement income products to support people across all stages of their savings journey. We are a growing and sustainable business with a clear purpose – helping people secure a life of possibilities.
