Phoenix ditches plan to sell SunLife business

The retirement and insurance firm said it had decided to halt the sale ‘given the current uncertainty in the protection market’.

Phoenix Group has hailed record first half results (Phoenix/PA)

Retirement and insurance firm Phoenix Group has scrapped plans to sell its SunLife over-50s financial services business.

The group, which revealed in June that it was considering the sale of the finance specialist, said it had decided to halt the process “given the current uncertainty in the protection market”.

Phoenix said the move would not have maximised value for shareholders in the current market, adding that SunLife was a “valuable asset which contributes to the group’s new business growth”.

“Phoenix will now explore ways of enhancing the value SunLife generates within the group,” it said.

It came as Phoenix reported a 15% rise in underlying operating profits to £360 million in the first half of the year, boosted by its pensions and savings business.

FTSE 100-listed Phoenix said in June that SunLife was “no longer core to the delivery of its vision of becoming the UK’s leading retirement savings and income business”.

It had received a number of expressions of interest from possible suitors.

But at the time insurance experts had said that the potential disposal appeared “slightly odd”, given Phoenix’s focus as a consolidator of life and pensions firms.

The SunLife division was purchased by Phoenix as part of a £375 million deal in 2016.

Phoenix said SunLife contributed a reported pre-tax profit of £16 million in 2023.

In its interim results, Phoenix added that it was on track to deliver around £50 million of cost savings by the end of 2024 thanks to its “business simplification” programme.

Phoenix has £289 billion of assets under management for around 12 million customers.