Platform pension flows outstrip ISAs fourfold in Q1

Natalie Kenway reports...

Pension flows on platforms in the first quarter were four times stronger than ISA sales, as the latter fell to the lowest level since 2012, according to the latest Fundscape Platform Report.

The figures show new flows into pensions on platforms rose to £5.6bn in Q1, bringing total assets under administration to £115.5bn, while ISA net flows were just £1.3bn in the first three months of the year.

The report revealed gross ISA sales were down by 15% and net sales down 40% compared to the same quarter in 2015, while pension business maintained momentum with net flows up on the previous quarter, as well as Q1 2015.

“2015 was Anno Pensionis (the year of the pension) and since then there has been a marked rise in pension flows,” said Bella Caridade-Ferreira, CEO of Fundscape and author of the Platform Report.

“Although the first quarter is traditionally the start of the ISA season, pension flows were four times stronger than ISA activity.”

She added: “ISA activity is likely to improve modestly in the second quarter, but concerns around Brexit will suppress demand. It has had less of an impact on pension business.

“Investment activity is likely to be muted until the second half of the year and even longer if the UK votes for a Brexit. Platforms with a strong focus on retirement propositions will benefit the most this year.”

Overall, platform assets under administration rose by £13bn, or 3%, to £415bn.

Although gross platform sales totalled £21.2bn in Q1, net sales slipped below £10bn (£9.4bn) for the first time since the third quarter of 2014 as volatile stockmarkets caused by China concerns and Brexit worries weighed on investor sentiment.

Cofunds saw the most asset growth of 4%* in Q1, but Hargreaves Lansdown had the highest net sales at £1.2bn*.

*For timing reasons and because the data is market sensitive, Hargreaves Lansdown and Cofunds report their figures to Fundscape a quarter in arrears. The figures shown here have been estimated from actual Q415 data and historical trends.