Royal London — which includes the former Scottish Life and Scottish Provident businesses — said its new life and pensions business was up by 39% to £4.2 billion for the first half of this year, a record for the firm.

It said funds under management were up by 11% to £93.8 billion from £84.5 billion at the end of 2015.

Operating profit on a European embedded value basis increased by 20% to £138 million.

The firm said its intermediary protection business was up 24% to £287 million compared to the same period last year, group pensions rose 66% to £1.92 billion and individual pensions and drawdown were up 17% to £1.78 billion.

Royal London CEO Phil Loney said: “Despite the reduction in interest rates, profit margins have held up well …

“We have indicated that we expect a slowing of the rate of growth in workplace pensions for some time and this indeed is beginning to come through in the new business figures.

“As smaller employers are now starting to auto-enrol the revenue from these schemes is lower than in earlier phases which were dominated by larger schemes.

“Nonetheless the number of schemes continues to grow and new business growth in group pensions was ahead by 66% on the same half-year period in 2015.

“As the auto-enrolled market matures we are beginning to see a new trend; the growth of a secondary market as advisers recommend schemes move to take advantage of better quality scheme administration or investment options.

“Royal London has benefited from this trend, taking on schemes that have already auto-enrolled with other providers.

“This ‘flight to quality’ introduces competition to the market and will result in better outcomes for scheme members.”

Loney said Royal London Asset Management recorded a strong performance in the first half of 2016. Institutional business was particularly strong, with a number of new clients investing in credit and government bond portfolios.

Royal London, the UK’s largest mutual life, pensions and investment company, employs more than 1,200 in Scotland.