Annual Report and Accounts 2025
M&G plc Annual Report and Accounts 2025 Strategic Report Governance Financial information Other information
2025 Financial highlights
Assets Under Management and Administration (AUMA)i
£375.9bn
(2024: £345.9bn)
Net flows from open business
£7.8bn inflow
(2024: £1.9bn outflow)
Adjusted operating profit before tax
£838m
(2024: £837m)
Shareholder Solvency II coverage ratio
242%
(2024: 223%)
IFRS result after tax
£314m
(2024: £(347)m)
Operating capital generation
£765m
(2024: £933m)
Actively invested
At M&G, we have 175 years of experience navigating challenges and opportunities -whether that's managing investments, supporting saving, providing financial advice or offering retirement solutions -to help give people and businesses the confidence to put their money to work.Operating change in Contractual Service Margin (CSM)
£246m
(2024: £294m)
Dividend per share (ordinary)
20.5p
(2024: 20.1p)
Key
Key performance measure Alternative performance measure
Linked to remuneration measures for Executive Directors
i All financial measures are defined in Supplementary Information on pages 323-324.
M&G plc Annual Report and Accounts 2025 Strategic Report Governance Financial information Other information
Actively invested in…
peace
of mind
Through access to our PruFund
offering we help customers grow their money over the long term while smoothing the impact of short-term market volatility.
1
A steadier way to grow and protect customers' moneyPruFund is a group of globally diverse, multi-asset funds, designed to deliver more
predictable long-term returns for customers, by reducing the impact of short-term market volatility through its smoothing mechanism. PruFund is part of M&G's £134 billion With-Profits Fund and through access to our market leading investment expertise, PruFund invests in a wide range of assets in the UK and internationally, including private and public markets, real estate and infrastructure: assets as diverse as Seeker Music's chart topping back catalogue, Manchester's Arndale shopping centre and African solar energy distributor Sun King. Trusted by over 500,000
customers, PruFund hit a record £69.8 billion assets under management at the end of 2025.
▶ Find out more about Seeker Music on page 10
M&G plc Annual Report and Accounts 2025 Strategic Report Governance Financial information Other information
ContentsPart 1
3-77
Strategic ReportOur business
3 M&G at a glance
5 Chair's statement
6 Group Chief Executive Officer's statement
8 Our business model
11 Market and industry trends
12 Our strategy
Business review
14 Asset Management
16 Life
18 Business and financial review
Stakeholders
32 Section 172 Statement
34 Our stakeholders
37 Our colleagues
Risk management
40 Risk management
49 Viability statement
Sustainability
52 Sustainability at M&G
55 Non-Financial and Sustainability Information Statement
58 Resilient Planet
75 Resilient Societies
79-139
Governance79 Chair's introduction to governance
81 Board of Directors
Corporate Governance Report
85 Board leadership and company purpose
87 Division of responsibilities
89 Composition, succession and evaluation
94 Audit, risk and internal controls
95 Nomination and Governance Committee Report
97 Audit Committee Report
103 Risk Committee Report
105 Directors' Remuneration Report
108 Remuneration at a glance
111 Annual Report on Remuneration
132 Directors' Remuneration Policy Summary
135 Directors' Report
139 Statement of Directors' responsibilities
Part 2
142-337
Financial information142 Independent auditors' report
158 Consolidated Financial Statements
314 Company financial statements
323 Supplementary information
339-340
Other informationShareholder information
Contact us
Stay up-to-date with more information at:
group.mandg.com
▶ A Glossary of terms used in this report is available
at group.mandg.com
Parts 1 and 2 together comprise
M&G plc's Annual Report and Accounts for the purposes of Section 423 of the Companies Act 2006.
The Strategic Report presented in our Annual Report and Accounts for the year ended
31 December 2025 has been prepared in accordance with the Companies Act 2006 and the Disclosure and Transparency Rules (DTR) issued by the FCA. The Risk management section describes the principal risks and uncertainties on
pages 42-48.
In preparing this Strategic Report we have considered the guidance issued by the Financial Reporting Council.
The Strategic Report was approved by the Board of Directors on 11 March 2026 and signed on their behalf by:
Andrea Rossi
Group Chief Executive Officer
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2
M&G plc Annual Report and Accounts 2025 Strategic Report Governance Financial information Other information
M&G at a glanceWho we are
We are an internationally recognised active asset manager and
an established life business, with a well capitalised With-Profits Fund
With our international presence and
£375.9 billion of assets under management and administration, we use our strong investment
I
Asset Management
capabilities to help our customers and clients invest for the long-term, in line with our purpose to give everyone real confidence to put their money to work.
D
A
C Life
B
Life£192.2bn
G
Group AUMAE
£375.9bni
F
Asset Management (external clients)
Life (managed by internal asset manager) Life (not managed by internal asset manager)
i Includes corporate assets of £0.8 billion
Who we serveH
Asset Management£345.2bn
We sell our active asset management capabilities to retail and institutional clients, including a range of
investment strategies and propositions that utilise our market-leading investment expertise across private assets, public fixed income, public equities, and multi-asset solutions.
Public assets Private assets
▶ Find out more about Asset Management on pages 14-15
Where we operateWe have a global presence, with 38 offices across six continents.
▶ See our global investments at group.mandg.com
Our Life business offers savings and retirement products, including access to PruFund which forms part of our With-Profits Fund. We maintain a portfolio of annuities, including Bulk Purchase Annuities (BPA). The Life business also offers wealth and advice services.
PruFund With-profits traditional Shareholder annuities Other (incl. Wealth)
▶ Find out more about Life on pages 16-17
4.2+ million retail customers and more than 1,000 institutional clients such as pension funds and insurance companies, as well as other financial partners around the world.
3
M&G plc Annual Report and Accounts 2025 Strategic Report Governance Financial information Other information
M&G at a glance continued
Our purpose and values
Everything we do flows from our purpose. Through our values of care
Our diverse workforceiand integrity, our global workforce is actively invested in delivering on our strategy and supporting our communities
7.0%
Asian
1.5%
Black
1.5%
Minority Ethnic
43.4%
White
Our purposeTo give everyone real confidence to put their money to work
Our valuesCare
We act with care - treating customers, clients and colleagues with respect.
Integrity
We empower our colleagues to do the right thing, honouring our commitments to others and
acting with conviction.
▶ Read more on our behaviours on pages 37-39
46%
Women
Diversity throughout M&G54%
Men
Delivering against our strategic pillars▶ Read more on our strategy on pages 12-13
i Based on data from our core HR data system, which is configured to record ethnicity data in the UK and Ireland only. The 'undisclosed' figure therefore includes a large proportion of overseas colleagues where ethnicity data is not captured. Data from some recently acquired subsidiaries is not included.
446.6%
Undisclosed
▶ Read more about our colleagues on pages 37-39
Our communitiesOur community investment strategy focuses on two strategic priorities: Building Financial Confidence and Building Resilient Communities. Through our charity partnership with The Tree Council we are 'greening' urban areas by planting trees to support biodiverse community habitats.
▶ Read more on resilient societies on pages 75-77
Chair's statement
Confidence in our business model
Strengthening our capabilities and international presence
I am proud of how M&G has continued to support
our customers, clients and shareholders during 2025.
We have executed against our strategy - prioritising investment performance, sustainable profitable growth, and successfully navigating market volatility. Once again demonstrating our resilience and the unique strength
of M&G's balanced and integrated business model.
In our Asset Management business, we've seen strong growth across Europe and Asia with positive investment flows. We also agreed a landmark partnership with Dai-ichi Life HD -
one of Japan's largest listed life insurers - becoming their preferred asset manager in Europe.
Our Life business has attracted positive PruFund net inflows in the second half of the year, closed more bulk purchase annuity deals and launched a fixed-term annuity product, building on our wide range of tailored retirement solutions.
The business is generating momentum and our strategic execution is enabling growth across the Group, strengthening both our capabilities and international presence.
Whether it's new partnerships, winning new investment mandates or enhancing our customer and client offering, our results demonstrate how we are delivering our purpose: to give everyone real confidence to put their money to work.
As we look ahead, we're committed to going further -supporting more people in more places and capitalising on opportunities to deliver attractive products and improved services that meet customer and client needs.
We continue to enrich our decision-making, engaging with
a series of valued partners including Government, regulators, shareholders, trade associations, Non-Governmental Organisations (NGOs) and charities.
I remain very fortunate to collaborate with such a committed and highly capable management team under Andrea's leadership and I deeply value the continued insight and support of my Board colleagues.
My focus is ensuring our Board brings together a rich breadth of perspectives, expertise and challenge to support the effective delivery of our strategy.
Our strategic execution is enabling growth across the Group.
Sir Edward Braham
Chair
Reflecting our strategic progress, the Board has announced
a second interim dividend of 13.8 pence per share, resulting in a total dividend of 20.5 pence per share for 2025. The Board's intention is to maintain a progressive and sustainable dividend policy.
An inclusive culture contributed to our success. Once again, I would like to thank our over 6,000 colleagues for their dedication in delivering all of the progress we have seen
in 2025.
Against a backdrop of geopolitical uncertainty, our diversified business, strong balance sheet and disciplined long term approach provides strong foundations for future
profitable growth.
I have confidence that with the strength of our business model and the expertise of our people, the Group will continue to grow and deliver for shareholders, as well as continuing
to best serve the interests of our customers, clients and communities.
Sir Edward Braham
Chair
Group Chief Executive Officer's statementA year of real momentum
Delivering our strategic priorities to drive profitable growthIt is now three years since we launched our refreshed strategy and we have continued to deliver on our priorities in 2025. Our performance shows real momentum, as
we position M&G for the next phase of sustainable, profitable growth.
Our balanced and integrated business model continues to underpin our progress, enabling us to deliver for our colleagues, customers, clients, shareholders and communities. This was never more important as we navigated a sharp period of market volatility at the start of the year.
Despite this, we remained resilient and continued to innovate, expand our international presence and forge new business partnerships that make M&G stronger. Our focus remains
on thriving together with colleagues and driving shareholder value by delivering against our strategic pillars - financial strength, simplification and growth.
We remain confident that the strength of our business model, international footprint and depth of our investment expertise will continue to be a source
"of competitive advantage.
Andrea Rossi
Group Chief Executive Officer
Financial strengthWe have continued to strengthen our balance sheet, building on the momentum of previous years, while investing for growth by expanding distribution and investment capabilities across the Group, which is supporting new business volumes.
This is underpinned by strong financial results generating
£928 million of operating capital excluding new business strain, marking a strong start towards our new three-year cumulative target of £2.7 billion by the end of 2027.
We end the year having maintained a strong balance sheet with a shareholder Solvency II coverage ratio of 242%, reinforcing the commitment to our progressive
dividend policy.
SimplificationWe are streamlining our business through a number of operational initiatives, allowing us to deliver £250 million of cost savings, exceeding our upgraded target of £230 million for the three years to the end of 2025.
Our transformation programme continues to reflect our commitment to operational excellence and improved client outcomes. We have strengthened capability in our global operations, continuing to improve customer experience with the use of advanced technology.
AI will be an enabler for growth and we remain focused on increasing adoption across the business to strengthen processes, drive productivity and enhance the services we deliver.
The external environment, driven by geopolitical events and continued economic uncertainty, underlines the importance of effective risk management. Therefore, in 2025 another ongoing focus has been to enhance our control environment and the tools we use to manage risk across the business.
Group Chief Executive Officer's statement continued
GrowthOver the year we have seen strong growth with increased net flows from open business, the launch of new retirement solutions and entering into a landmark partnership with
Dai-Ichi Life HD - giving M&G real momentum.
Net inflows of £7 billion from external asset management clients during 2025 is an outstanding result - our highest since listing in 2019 - powered by strong investment performance, with over 80% of our Institutional funds by AUMA outperforming their benchmarks on a three-year basis (76% over five years), and the success of our European and Asian operations. Today, nearly 60% of Asset Management's third-party AUMA come from clients outside the UK, up from 37% five years ago.
The £7 billion of net inflows from external clients during 2025 is an outstanding result.
Andrea Rossi
Group Chief Executive Officer
Asset Management revenue increased by 6% year-on-year and our transformation programme has driven a reduction in costs with the cost-to-income ratio falling from 79% to 75% since 2023.
A highlight of the year has been the formation of our long-term strategic partnership with Dai-ichi and we have already seen net client inflows of £0.4 billion in 2025 from this collaboration. As Dai-ichi's preferred asset manager for Europe, we expect to generate at least US$6 billion of new business over five years, with US$3 billion allocated to high-alpha strategies.
The partnership increases M&G's profile in Asia, with Dai-ichi's intention to increase their current holding to a c.15% stake in M&G, aligning our interests for mutual success.
In our Life business, we continue to innovate and offer clients attractive retirement solutions driving growth. During 2025, we launched a fixed-term annuity with our Prudential Guaranteed Income Plan, backed by our £134 billion With-Profits Fund.
Our flagship proposition, PruFund, which offers a smoothed solution to help customers navigate volatile markets, has seen positive momentum with an increase in gross client inflows and stable gross client outflows.
We have also continued to invest in our Bulk Purchase Annuity (BPA) capabilities by scaling our Origination, Proposition and Pricing teams and implementing new longevity reinsurance.
We wrote £1.5 billion of BPAs in 2025 which is a 65% increase year-on-year, meaning we are on track to meet our ambition for £3-4 billion annual sales by 2027. Our differentiated offering, including an innovative Value Share BPA, positions us strongly in an increasingly competitive market.
Adjusted operating profit remained stable at £838 million (2024: £837 million). Due to the actions we have taken on growth and simplification in the year we remain confident that we are on track to achieve our target of 5% annual average growth in adjusted operating profit over the three years to the end of 2027.
Empowering colleagues who continue to deliverI want to say thank you to all of my colleagues and our many partners who have helped us achieve so much during 2025.
Our people are at the core of our success as we continue to foster a workplace where everyone can flourish. Our new brand identity is indicative of the momentum colleagues are creating.
Our Group-wide sustainable engagement score remains strong, supported by an inclusive culture, enabling colleagues to deliver on our priorities and make a real difference to wider society through our investment expertise and community initiatives.
I would also like to say thank you to my leadership team who continue to drive the business forward in meeting our strategic priorities.
We said goodbye to Benoît Macé in 2025, who played a pivotal role in delivering M&G's transformation agenda and spearheading acquisitions with BauMont, P Capital Partners and negotiating our partnership with Dai-ichi, and welcomed Simon Tasker as our new Chief Transformation Officer with over three decades of experience of delivering large-scale growth initiatives.
Employee sustainable engagement score
71
(2024: 69)
Our colleague OneVoice surveys over 2025 highlighted that our culture is a strength, with colleagues treating one another with respect and dignity.
▶ Find out more about our colleagues on pages 37-39
Geopolitical events continue to have the potential to present challenges and impact market sentiment for financial institutions around the world. Against this backdrop, we remain confident that the resilience and strength of our business model, international footprint and depth of our investment expertise - particularly across Europe and Asia, where global investors are looking to diversify - will continue to be a source of competitive advantage.
Since setting out our refreshed strategy we have worked hard to transform M&G. As we enter the next phase, I am excited about the opportunities to drive sustainable, profitable growth for shareholders and excellent outcomes for customers and clients in 2026 and beyond.
Andrea Rossi
Group Chief Executive Officer
Our business modelOur balanced and integrated business model
Our business model is to gather assets and invest for the long term to deliver attractive financial outcomes for our customers and clients, as well as superior returns for our shareholders. We leverage our capital strength and investment expertise, allowing us to develop innovative
savings and investment propositions that meet customer and client needs through our Asset Management and Life businesses.
We are an internationally recognised active asset manager with market-leading expertise in private assets, public fixed income, public equities and multi-asset solutions, including our expanding range of thematic sustainability-driven products.
We are an established Life business with a strongly capitalised With-Profits Fund. With a heritage of 175 years and a strong brand, through our advice business and distribution network, we are well-positioned to understand and meet the needs of customers and advisers.
We have a long-standing track record of successfully managing a scaled balance sheet to provide security to our customers.
Gather assets
CUSTOMERS & CLIENTS
SHAREHOLDERS
Deliver
Provide returns
attractive
investment outcomes
MARKET-LEADING INVESTMENT EXPERTISE
ASSET MANAGEMENT
LIFE
INVEST FOR THE LONG TERM
Our strong investment capabilities underpin all that we do
How we create value
We create value by attracting net client inflows across our business and leveraging our strong investment capabilities to invest for the long termAttracting net inflows
Investing for the long term
ShareholdersOur strong balance sheet and the diversity of our earning streams support our dividends. Our strength across two businesses means we can deliver growth and attractive returns.
▶ Find out more about our financial performance on pages 18-31
Customers and clientsOur investment and insurance expertise combine to deliver best-in-class propositions and deliver attractive financial outcomes for our customers and clients.
▶ Find out more about our customers and clients
on pages 14-17
ColleaguesWe are committed to ensuring our colleagues' working lives are engaging and fulfilling, in a safe, inclusive and diverse environment, so they can contribute to
our success.
▶ Find out more about our colleagues
on pages 37-39
SocietyOur long-term horizon allows us to invest in what society needs, including real estate, infrastructure and technology.
Our Group Sustainability Framework is aligned with our purpose.
▶ Find out more about our approach to sustainability on pages 52-57
How do we do this?
Through our expertise in Asset Management and Life we develop innovative propositions to meet real needs of customers and clients, who can access these solutions through our wide distribution network. Underpinning
this is our consistently strong investment performance.
How does it create value?
Flows into our business drive our earnings and long-term capital generation. Flows also allow us to scale the business.
How do we do this?
Using the scale of the business including our well capitalised With-Profits Fund, combined with our expertise across public and private markets, we are able to make long-term investment decisions.
How does it create value?
By taking a long-term view for investment decisions, we can provide our customers and clients with guaranteed, smoothed and unsmoothed solutions. This also allows us as a business to support the transition to a sustainable economy.
Working for everyone
Our business model in action
Actively invested in…
innovation with M&G's investment in Seeker Music portfolio, reimagining hit musicThe value of M&G's business model is that it brings together two complementary strengths: a Life business that provides long-term capital, through our £134 billion With-Profits Fund and an asset manager with the expertise across public and private markets to invest actively. This allows us to back innovation, unlock new investment opportunities for our customers and clients and pursue long-term growth for our shareholders. Our investment in Seeker Music, a music publishing and record company, demonstrates this in action.
Using capital from the With-Profits Fund, the asset manager's Private Markets team - which serves external Institutional Investors as well as M&G's Life business - has invested in Seeker Music who manage a portfolio of music assets worth in excess of US$400 million.
Seeker Music's differentiated approach means that its creative team works with songwriters and musicians to reimagine or 'flip' old songs into new songs.
By acquiring and revitalising those with the highest artistic potential, Seeker is able to enhance income for artists and investors alike through creativity and innovation, amplifying songs and their associated income streams globally.
By tapping into new music technology and platforms, Seeker expands audiences, increases revenues and grows digital and physical consumption, alongside the more traditional methods of promoting songs in film, TV and advertising.
This investment demonstrates M&G's ability to invest beyond traditional asset classes and provide diversification for clients, while backing innovative businesses globally.
▶ Find out more about M&G's investment in Seeker Music in our investment story episode on M&G's YouTube channel
18,000+ songs
The size of the Seeker Music catalogue
of copyrights and master recordings
30+ songs
The number of Seeker's songs in Spotify's
prestigious 'Billion Club' - a testament to their immense popularity and widespread acclaim
19 weeks
The number of weeks one of Seeker's flipped
songs, Shaboozey's 'A Bar Song (Tipsy)', spent at Number 1 in the US Billboard's Hot 100, becoming a global hit
Market and industry trends
Long-term opportunities and challenges
We are well placed to support our customers and clients and deliver value for all our stakeholdersThe macroeconomic and political environment remains uncertain and volatile
Ongoing economic uncertainty and geopolitical tension globally continue to drive market volatility, creating unpredictable financial conditions for savers and investors.
There is increasing client demand for flexible retirement solutions as well as smoothed solutions and guaranteed products as people seek stability amid a volatile market backdrop. In volatile markets, active asset management becomes increasingly important in creating value
for investors.
2.5x
Increase in market volatility in 2025 vs 2024
Source Bloomberg: number of days CBOE Volatility Index (VIX) >20
M&G positioning
Our business model, broad capabilities and expertise enable us to develop distinctive investment strategies that meet the evolving needs of our customers and clients.
Our differentiated offering combines active Asset Management and Life capabilities, including guaranteed and smoothed solutions, helping our customers and clients manage market uncertainty.
Growing need for retirement solutions and guidanceThe cost of living crisis, high levels of debt and housing costs are all factors that are impacting people's ability to save
for retirement.
With an increasingly ageing population, combined with differences in generational attitudes to saving and varying degrees of understanding when it comes to investing for the future, too many people are approaching retirement without a proper plan in place.
46%
UK adults who are currently saving for retirement don't feel like they are saving enough
Source: M&G: reframing retirement campaign
M&G positioning
We continue to expand our savings and investment proposition to offer a wider range of products and financial advice that support our customers' needs throughout their lifetime as requirements change.
We are also making their savings and retirement solutions more accessible by expanding our distribution channels.
Global sustainability challenges require support from private marketsPrivate markets investors are critical in supporting the transition to a more sustainable economy providing patient, flexible capital, operational expertise and innovative financing, alongside Government funding.
In addition, sustainability remains a key consideration for both institutional and retail investors, influencing investment choices.
~US$275trn
Total investment required to meet the COP28 transition targets by 2050
Source: IEA
M&G positioning
Our £81 billion private markets business invests for the long term across infrastructure, real estate and in private companies, with dedicated investment strategies focusing on sustainable and impact investments. An example is our purpose-led Catalyst Fund and our Social Investment Fund, targeting projects that generate positive social outcomes.
Through our PruFund offering we can provide retail investors exposure to private markets including funds that target a positive environmental and social impact.
Our strategyBuilding on our strengths to deliver on our strategy
We are continuing to deliver against our strategic prioritiesActively invested in…
our long-term growth priorities
Our long-term strategic partnership with Dai-ichi Life HD - one of Japan's largest listed life insurers - aligns with our strategic growth priority, focusing on growth, distribution and product development opportunities.
M&G has become Dai-ichi's preferred asset management partner in Europe and the partnership will accelerate our growth in Asset Management, opening up new potential sources of business flows in Japan and across Asia as well as the potential to collaborate on life insurance propositions in Europe and Japan.
In recognition of M&G's compelling business case and growth potential, Dai-ichi had acquired a 9.6% stake in M&G plc by the end of 2025, and intends to increase this to c.15% (subject to regulatory approvals).
Our purpose is to give everyone real confidence to put their money to work and the three pillars of our strategy are centred on ensuring we meet this.
The strength of our business model is helping us to deliver on our strategy. By combining our deep understanding of customer and client needs, compelling products, investment capabilities and our growing international footprint, we are continuing to transform M&G.
As we transform we are targeting good operational and financial performance, within a clear risk framework, attractive financial outcomes for our customers and clients, and strong returns for our shareholders.
We take a long-term approach to growth and value creation, building resilience in an uncertain world. This includes
how we address environmental and social challenges through the investments we manage on behalf of our customers
and clients, as well as how we run our business operations.
Our strategic pillarsMaintain
our financial strength
Ensuring our clients can depend on us, while
rewarding shareholders.
Simplify our business
Becoming more nimble
and efficient in how we work to best serve our customers.
Deliver profitable growth
Building on our strengths to better anticipate and address our clients' needs.
Our strategy continued
2025 Group highlights
Moved to a progressive dividend policy and increased dividend per share by 2% to 20.5p for 2025, continuing to deliver attractive returns for shareholders.
Generated £765 million of operating capital, contributing to our strong Solvency II shareholder coverage ratio of 242%. Operating capital generation excluding total new business strain for the year was
£928 million against our three year target to the end of 2027 of £2.7 billion.
Stable adjusted operating profit year-on-year with strong underlying momentum.
Our financial strength gives our customers, clients and shareholders confidence that we are the right long-term partner for them. We help our customers and clients put their money to work and achieve their financial goals. For shareholders, we carefully allocate capital to invest in sustainable, profitable growth opportunities and reward them with attractive, dependable dividends.
Our Group priorities
Continue to shift towards a capital-light model.
Progress on our target of cumulative operating capital generation excluding new business strain of £2.7 billion over the three years 2025-2027.
Maintain a progressive and sustainable dividend policy.
Maintain our financial strength
We are transforming the way in which we operate, so that we can better serve our customers and clients in the UK and internationally and deliver our growth strategy more efficiently. We want to unlock M&G's potential by enabling our colleagues and business partners to work together more effectively and improve the way we engage with customers and clients.
Our Group priorities
Continue to streamline our business model to enable us to work more effectively across the Group and deliver our growth priorities.
Simplify and automate our processes, using technology and AI, to improve efficiency, service and customer experience.
Reduce the Asset Management cost-to-income ratio to 70% by end of 2027.
2025 Group highlights
Completed our Group transformation programme, delivering cost savings of £250 million by the end of 2025 (against our upgraded target of £230 million).
Our transformation programme over the last three years has enabled us to create capacity, through organisation simplification, UK office optimisation and reducing third party costs to invest in growth, including expanding operational capability in bulk annuities and scaling asset management operations in the UK and internationally.
Continued to enhance customer journeys, increasing overall satisfaction rates and improving response time.
Simplify
our business
Our business model gives us distinct yet complementary capabilities that work closely together to leverage the strengths of our Asset Management and Life businesses. This creates a competitive advantage as we develop solutions and deliver outcomes for our clients and advisers and helps us unlock the growth potential of the combined Group, as our Asset Management capabilities underpin outcomes for our Life customers.
Our Group priorities
Broaden international presence and strengthen our distribution capabilities to enable more customers and advisers to access our solutions.
Leverage the strength of our business model to develop innovative products and investment solutions to meet evolving customer needs.
Adjusted operating profit annual growth of 5% or more on average over the three years 2025-2027.
2025 Group highlights
Generated £7 billion net client inflows in Asset Management (56% into private markets), delivered £1.5 billion in BPA new business volumes (65% increase on 2024) and PruFund returned to monthly net inflows during the second half of the year.
Enhanced international presence through our long-term strategic partnership with Dai-ichi Life HD and acquisition of P Capital Partners.
Continued to broaden our product offering and distribution with 16 new fund launches in Asset Management, launch of a retail fixed-term annuity in Life and integration of PruFund on FNZ technology which will enable access to the digital platform market.
Deliver profitable growth
▶ For detailed updates on 2025 progress and key priorities for 2026 in our Asset Management and Life businesses see pages 14-17
▶ For details on our approach to sustainability please see pages 52-57
Our businessesAsset Management
We are generating positive momentum, reflecting the quality and performance we offer our clientsWe have delivered another year of strong investment outcomes for our clients in what continues to be a
"challenging environment.
Joseph Pinto
Asset Management CEO
Business overviewWe are an international asset manager focused on active management across public and private markets. Our business is built on deep investment expertise and robust fund management, underpinned by proven investment processes and extensive in-house research.
Our Asset Management business manages £345.2 billion AUMA. This includes £162.3 billion on behalf of our own Life business, £109.0 billion for over 1,000 third-party institutional clients and £73.2 billion for wholesale clients.
ClientsOur clients are at the heart of all we do and we have a global network of investment and distribution teams that enable us to be a local partner to our clients wherever they are in the world. We work closely with them to build a deep understanding of their objectives so that we can deliver a broad range of investment solutions and outcomes tailored to their needs.
Our long-standing relationship with our Life business provides strong support for innovation through capital allocations to new solutions which we develop and then offer to our other clients, enabling us to attract third-party flows and
deliver scale.
Wholesale clients such as retail banking partners, private banks and wealth advisers have access to a family of UK-domiciled mutual funds, as well as a similar range of Luxembourg funds for international clients. We also offer access to sub-advised solutions and private assets through our European Long Term Investment Fund (ELTIF).
For Institutional insurance and pension fund clients we provide investment propositions covering both private and public assets through a variety of formats, from pooled funds to segregated mandates.
We provide a diversified set of investment capabilities to our clients:
Public Markets, managing £263.7 billion of assets, across public fixed income, equities and multi-assets.
Within Public Markets, M&G is recognised as one of Europe's leading Fixed Income investors, managing £140.2 billion of assets.
Private Markets, managing £80.8 billion of assets. M&G is a leading player in Europe, with capabilities focusing on real estate, private credit, infrastructure, private equity and impact investment.
Sustainability and impact are key focus areas and we have a range of capabilities to meet our client objectives including through responsAbility and our Catalyst strategy.
Progress against our strategyThe progress we have made in Asset Management during 2025 is aligned to the Group's strategic priorities (as set out on pages 12-13). We have continued to strengthen our business, adding resilience and flexibility through the foundational work in recent years to build a scalable operating model and enhance our leadership and investment capabilities.
Our ongoing emphasis on international growth and scale is delivering positive momentum with higher levels of new business inflows and increased revenue. We also established a major long-term partnership with Dai-ichi Life HD to be their preferred asset management partner in Europe, which is expected to generate at least US$6 billion of new flows for M&G over five years and support the international development of our business.
Simplify our businessContinued to reduce the Asset Management cost-to-income ratio from 79% in 2023 to 75% in 2025 through a combination of growth and efficiency gains. We remain committed to further improving the cost-to-income ratio, targeting 70% by the end of 2027.
Improved how we serve our customers through the initiatives of our client experience programme, contributing to a Net Promoter Score of +63, which puts us among the leaders in our peer group and a brand ranking of 11th in Europe, which is the most improved among all top 25 peers since 2022.
Focused on integrating our recent acquisitions in private markets, BauMont (value-add real estate) and P Capital Partners (corporate non-sponsor private credit), which have strengthened our capabilities.
Deliver profitable growthContinued to deliver consistent investment performance with 56% of wholesale funds by fund size continuing to be above median peer group performance over three years and 75% over five years; in our institutional business, 84% of fundswe manage for our external clients outperformed their objectives over three years and 76% over five years.
Further developed our range of propositions across both public and private markets, with 16 funds launched in the year and 29 new client-specific solutions for our institutional and discretionary wholesale clients.
Significantly increased net client flows - driven by a standout year in public equities - across institutional clients in Europe and with wholesale partners in all our key markets, equating to 4.4% of opening assets under management.
Strengthened and grew our international presence, with nearly 60% of third-party AUMA from non-UK clients. AUMA from Europe increased by 20% in 2025 and by 9% in Asia and we have delivered gains in cross-border market share in all of our key markets other than Taiwan.
Onboarded new long-term partnerships particularly opening new doors in Asia, including the new strategic partnership with Dai-ichi; our distribution joint venture in China with Guotai Haitong Securities; and our ongoing arrangement with OCBC in Singapore which has now generated over US$1 billion in new business flows since inception in 2024.
Key priorities for 2026We aim to build on the positive momentum in third-party flows across our target markets by continuing to deliver high quality, differentiated investment propositions in the UK and internationally, further enhancing client experience while maintaining cost discipline:
In public markets, building on the success of our core offerings to further globalise our business and tailor our propositions to the needs of our clients, especially in Asia.
Three year outperformance
Wholesale funds Institutional funds
56% 84%
(2024: 63%) (2024: 79%)
We measure the strength of our investment capabilities by reference to the investment performance of the funds and assets that we manage on behalf of our customers.
Performance in 2025
We have continued to deliver strong outcomes, with more than half our wholesale funds outperforming their sector median and over 80% of institutional assets outperforming their objectives, over three years.
Actively invested in…
using our business model to power Asset Management
Our Life and Asset Management businesses work together to deliver new investment vehicles for the benefit of our clients. During 2025, this approach led to the launch of two new semi-liquid evergreen fundsi, offering the best of both worlds - access to private markets investment strategies with the flexibility of quarterly liquidity - making them attractive to a wide range of investors. By pooling capital from our Life business and scaling these funds
with external investors, we strengthen our position in the market.
M&G Global Private Equity Fund: Focused on global buyouts, invests as both a primary and co-investor, providing efficient access to private equity for clients new to the asset class.
M&G Global Infrastructure & Real Assets Fund: Offers exposure to global infrastructure through primary and co-investments with mid-market managers, delivering
diversification and access to essential projects worldwide.
i Semi-liquid evergreen funds are open-ended funds that allow investors to enter and exit periodically, unlike traditional closed-ended private equity funds that lock up capital for 10+ years.
Extending our range of private markets products for third-party clients by making available proven strategies that we originally developed for our internal Life business, such as private equity funds of funds, our purpose-led Catalyst strategy, and infrastructure debt. We expect to accelerate our presence in the wealth channel with our highly relevant propositions, including through semi-liquid evergreen funds, ELTIFs and LTAFsi.
Broadening our proposition to UK institutional clients, offering a range of options that meet the evolving needs of defined benefit pension funds, by leveraging the capabilities of our Life business to develop run-on solutions for defined benefit pension scheme clients.
Continuing to develop our relationships with our long-term partners to support our international growth ambitions, including working with Dai-ichi as their preferred partner in Europe to capitalise on the significant private market opportunities there and enable even greater access to the Japanese and Asian markets.
Maintaining our focus on client experience to ensure we deliver consistent, high-quality service as we scale internationally.
i European Long-Term Investment Funds and Long-Term Asset Funds are regulated investment structures designed to attract capital into longterm, illiquid assets like infrastructure, real estate and private equity.
Life
We have increased our product range to meet our customer needs and are focused on driving profitable growth
"During 2025 we accelerated our growth trajectory, with higher volumes of bulk purchase annuities, and PruFund returning to consistent net inflows in the second half of the year.
Clive Bolton
Life CEO
Business overviewWe currently serve over 4.2 million customers in the savings and pensions market, who are increasingly looking for support across a broad range of financial needs. Our four core business areas are aligned to support them throughout this journey, by providing advice and propositions suitable for every life stage.
Customers and clientsIndividual Life & Pensions addresses the needs of UK retail customers for investment growth, smoothed returns and guaranteed income through a range of solutions, including our flagship PruFund proposition, with £69.8 billion of AUMA and retirement products such as annuities and income drawdown.
International Life includes our savings businesses in Ireland and Poland, with a further focus on international diversification of our With-Profits Fund and broadening the distribution of PruFund to new markets.
Corporate Pension Solutions services our corporate customers, with a focus on scaling our presence in the UK through our innovative Bulk Purchase Annuities (BPA) options which are supported by both shareholder capital and our With-Profits Fund.
Advice provides holistic financial planning services to help retail customers plan and save for the future, with a national footprint of over 550 advisers, making us one of the largest advice businesses in the UK.
We have a close relationship with our Asset Management business, which helps to provide excellent outcomes for our customers through smoothed income and multi-asset investment solutions. Our PruFund proposition continues to offer strong, diversified long-term investment performance, with our key PruFund Growth Fund returning 163% over five years, comfortably outperforming the IA Mixed
20-60% sector.
Net Promoter Score
+24
(2024: +22)
Net Promoter Score (NPS) is a measure of the willingness of a company's clients to recommend its products or services to others. It is measured across a rolling
six-month period.
Performance in 2025
The NPS score increased by 2 points during 2025, rising from +22 to +24. This continues the long-term positive trend observed since December 2021, with the cumulative effect of consistent improvements taking the score from a low of +9 to +24. Over time, customer service has increasingly been cited as a reason for recommendation.
In 2025, we have continued to drive progress against our Group strategic objectives (as set out on page 13). We have brought new propositions to market, to meet a wider range of customer needs for both individuals and corporates and have continued to utilise the capital strength of both our shareholder balance sheet and With-Profits Fund to generate innovative, differentiated solutions and attractive outcomes.
Our strong financial position is further underscored by the results of the PRA's 2025 Life Insurance Stress Test, with our Group and PAC shareholder Solvency II ratios remaining resilient under severe but plausible financial stress scenarios.
Simplify our businessWe have made a significant investment in how we engage with our customers and advisers by increasing our ability to interact digitally and through intelligent automation, which has contributed to improvements in customer satisfaction and adviser satisfaction - see box on the right.
During 2025, we continued to integrate our Life and Wealth businesses and streamlined our Advice proposition into a single simplified structure, eliminating duplication and reducing operational complexity. This has resulted in faster, more consistent response times and a greater focus on our core product set, laying the foundations for growth.
Deliver profitable growthIndividual Life & Pensions: broadening the full suite of retirement products available through our revitalised Retirement Account - now including the Prudential Guaranteed Income Plan and the Prudential Retirement Plan
- and improving our distribution network has driven a marked improvement in new business.
International Life: while our existing business has also grown during 2025, with 28% growth in bond sales, a recently agreed distribution partnership in the Middle East represents a step-change in scale, highlighting our ambitions and unique capabilities in this attractive segment of the global market.
Corporate Pension Solutions: we have written £1.5 billion of new BPA business across 11 transactions, marking a significant acceleration in our trajectory, following
£0.9 billion of new business in 2024. This demonstrates the strength of our proposition and the innovative options available to our corporate clients.
Advice: At the end of the year, we launched Adviser Hub, which provides AI-powered support and technical resources to strengthen the operating model and lead to improvements in adviser efficiency.
Key priorities for 2026Actively invested in…
fixing the fundamentals to deliver for our customers
We continue to deliver changes that make a real difference to the service we offer our customers.
Customer Care team: We introduced a team who will proactively intervene to resolve issues raised by customers. For those supported so far, the likelihood of complaining has fallen from 19% to just 3%.
Managing expectations: Customers told us they wanted more proactive updates, so we enabled SMS functionality, boosting customer satisfaction by 20% and reducing repeat demand by 8%.
Inbound call handling: Improved messaging and routing mean customers reach the right person first time, driving a 16% increase in satisfaction with call wait times.
Our efforts have delivered significant improvements over 2025:
Customer satisfaction: up 5 percentage points to 64%
Adviser satisfaction: up 9 percentage points to 75%
We have repositioned our business for growth by improving our operational platform and revitalising the range of products we offer to our retail customers, third-party distributors and corporate clients. With a stronger foundation, we are now well positioned for growth, both in the UK and internationally:
Having integrated PruFund on FNZ technology during 2025, we are focused on onboarding platforms to access the
£0.7 trillion digital adviser platform market in the UK, so that even more advisers and customers can benefit from it.
We plan to enhance distribution of our new drawdown and bond products alongside our fixed term annuity product, which has appealed to both affluent and mass market customers. We also expect to return to the pension annuity market with the launch of our new With-Profits Individual Lifetime Annuity.
We have a strong pipeline in core BPA and we recently launched our with-profits bulk annuity, which is another industry first following on from the innovative value-share annuity that we brought to the market in 2024. We will continue to strengthen M&G's competitive position through product innovation, further differentiating our offering and supporting our long-term growth in this attractive market, where we expect to achieve £3-4 billion of annual sales
by 2027.
We will identify and progress further global opportunities to leverage the strength of the With-Profits Fund for the benefit of its policyholders and corporate customers seeking novel capital solutions.
We continue to embrace technology and intelligent automation to improve customer service and operational processes. This means evolving to a digital-first self-service model for routine tasks and expert human assistance when needed, the aim of delivering quicker responses, fewer handoffs and an effortless experience for customers.
Delivering for our shareholders
Our results demonstrate further progress on our growth and simplification priorities while maintaining our financial strength
It is my pleasure to present our 2025 financial results following a year in which we have continued to demonstrate progress against our growth and simplification strategic priorities while maintaining our financial strength and delivering for
our shareholders.
Net inflows from open business of £7.8 billion, up nearly
£10 billion year-on-year, are significant and reflect the strength of our investment expertise and our focus on delivering growth. Our Shareholder Solvency II coverage ratio increased to a very strong 242%, despite a fall in operating capital generation following the capital impact of writing new business also reflective of our growth in the year.
On simplification I am proud that we have delivered
£250 million of cost savings against our target of £230 million over three years to the end of 2025. Going forward we will continue to maintain discipline on costs and further simplify the business in line with our strategic priority.
AUMA and net client flowsTotal AUMA has increased to £375.9 billion (2024:
£345.9 billion), benefiting from positive market movements and net inflows from open business of £7.8 billion (2024:
£1.9 billion net outflows). Net flows from open business reflect net inflows from Asset Management and Life of £7.0 billion and
£0.8 billion respectively, compared to net outflows in 2024.
Wholesale net flows increased by £3.0 billion with strong investment performance particularly in European equities, contributing to the growth. Institutional inflows of £4.0 billion, up from £0.9 billion net outflows in 2024, were also strong with positive net inflows in the UK contributing to the overall position as outflows from the ongoing defined benefit pensions de-risking were more than offset by new mandates won in the year.
Asset Management international growth also continued with
£107 billion third-party AUMA from clients outside of the UK, up £18 billion during the year, now representing nearly 60% of total Asset Management third-party AUMA.
In Life, PruFund net outflows improved to £0.2 billion (2024:
£0.9 billion) following momentum in the second half of the year. Life also benefited from net inflows of £0.4 billion for shareholder annuities as the inflows from bulk purchase annuities written in the year more than offset the outflows from the run-off of traditional annuities. This marks the first time shareholder annuities have been in a net inflow position since the business stopped offering new individual annuities in 2016.
EarningsAdjusted operating profit before tax (AOP) was stable at £838 million (2024: £837 million) with improved Life AOP benefiting from higher contributions from PruFund and traditional
with-profits, offsetting reductions in the results from Asset Management and Corporate Centre. Asset Management revenue grew by 6% with the cost-to-income ratio reducing from 76% to 75%, as the cost base absorbed the impact of inflation and expenditure on growth initiatives in the year.
We are committed to achieving a 70% Asset Management cost-to-income ratio by the end of 2027.
This is the first year of our target for AOP annual growth of 5% or more on average over the three years 2025-2027 and with the momentum in flows, our strong investment performance, and our disciplined approach to costs, I am confident that we remain on track to achieve this.
Our 2025 IFRS result has returned to net profit after tax in the year of £314 million (2024: £347 million loss) with the main driver being the improvements in equity markets and longterm bond yields which reduced the overall losses year-on-year in relation to short-term fluctuations from £643 million in 2024 to £164 million in 2025.
I am proud that we have delivered
£250 million of cost savings against our target of £230 million by the end of 2025.
Kathryn McLeland
Chief Financial Officer
Operating change in Contractual Service Margin (CSM) decreased to £246 million (2024: £294 million), with a lower benefit from assumption changes for shareholder annuities partially offset by an increase in the new business contribution and a higher benefit from assumption changes and variances for with-profits business. Overall the CSM also benefited by positive market movements leading to a 10% increase since the start of the year to £6.6 billion (2024: £6.0 billion).
Capital and liquidityAs at 31 December 2025, our Shareholder Solvency II coverage ratio increased to 242% (2024: 223%) demonstrating our continued financial strength.
Operating capital generation decreased to £765 million from
£933 million in 2024, impacted by the new business strain of
£134 million on £1.5 billion of bulk purchase annuities written in the year.
As previously announced we are now targeting £2.7 billion cumulative operating capital generation (excluding new business strain) for the three years to 2027. Operating capital generation excluding total new business strain for the year was £928 million, which is a good start to the new target.
In January 2026, the UK Government announced proposals on Leasehold reform, which impact ground rent assets that we hold both to back our shareholder annuity liabilities and in the With-Profits Fund. Further details of the proposals and the expected impact are provided in Note 38 to the Consolidated financial statements.
The impact on our Shareholder Solvency II coverage ratio from the announcement is expected to be a reduction of
3 percentage points compared to 242% at 31 December 2025.
DividendWe paid an interim ordinary dividend of £161 million equal to
6.7 pence per share on 17 October 2025. A second interim dividend of £328 million equal to 13.8 pence per share will be paid on 30 April 2026, which means 20.5 pence per share of total dividends will be paid to shareholders in relation to 2025.
Kathryn McLeland
Chief Financial Officer
Actively invested in…
the untapped potential of female foundersIn March 2025, M&G hosted the Investing in Women Code Summit at our London headquarters, reaffirming our commitment to improving access to finance for women-led businesses. Group CFO Kathryn McLeland, executive sponsor for Embrace - M&G's diversity, inclusion and wellbeing network - opened the event by highlighting persistent gender gaps in venture capital, where women remain under represented and receive only a fraction of funding.
M&G was one of the first signatories of the Investing in Women Code, through our Catalyst private assets strategy.
Catalyst deploys meaningful capital to gender focused investments, backing female founders and women-led venture and private equity funds across the US, Asia-Pacific, EU and UK. Supported by our With-Profits Fund, it targets innovative businesses addressing social and climate challenges while seeking long term returns.
This complements the UK's Invest in Women Taskforce, which aims to drive change and boost funding for female entrepreneurs. We marked the Taskforce's first annual report with a cake missing a slice - symbolising the UK's untapped economic potential when female founders lack the backing they deserve.
Financial highlights
We use a range of key performance measures to track how we are executing against our strategy Assets under management and administration (AUMA)£375.9bn
(2024: £345.9bn)
AUMA is a key indicator of our scale and demonstrates our potential earnings from investment return and fee income.
Performance in 2025
AUMA increased by £30.0 billion from favourable market movements and strong net inflows from open business.
▶ Find out more on pages 21-22
Operating capital generation£765m
(2024: £933m)
Operating capital generation demonstrates the longer-term view of the movements
in our surplus capital. It is less affected by short-term volatility than total capital generation.
Performance in 2025
Operating capital generation remains resilient with the reduction reflecting the capital deployed to support growth in bulk purchase annuities.
▶ Find out more on page 29
Net flows from open business£7.8bn inflow
(2024: £1.9bn outflow)
Net flows from open business indicate how our business grows and how successful it is at retaining and attracting new clients.
Performance in 2025
Strengthened Asset Management performance and positive momentum from PruFund along with significant bulk purchase annuities inflows.
▶ Find out more on pages 21-22
Total capital generation£833m
(2024: £1,108m)
Total capital generation is an integral financial metric that measures the change in surplus capital during the period, before dividends and capital movements.
Performance in 2025
Total capital generation reflects the robust operating performance with the decrease from 2024 mainly due to the removal of regulatory restriction in 2024.
▶ Find out more on page 28
Adjusted operating profit before tax (AOP)£838m
(2024: £837m)
AOP demonstrates our longer-term performance to equity holders, as it is less affected by short-term market
volatility and non-recurring items than IFRS profit before tax.
Performance in 2025
Stable AOP with an improved result in Life offsetting lower Asset Management and Corporate Centre contribution.
▶ Find out more on pages 23-25
Shareholder Solvency II coverage ratio242%
(2024: 223%)
The shareholder view of the Solvency II coverage ratio provides a more relevant reflection of our capital strength than the regulatory Solvency II coverage ratio.
Performance in 2025
Ratio increased as a result of reduced capital requirements driven by the impact of management actions and
modelling developments.
▶ Find out more on page 30
Operating change in Contractual Service Margin£246m
(2024: £294m)
Includes changes from new business, interest accretion, experience changes and release of CSM but excludes the impact of short-term market movements, mismatches and restructuring costs.
Performance in 2025
Operating change in CSM decreased by
£48 million to £246 million in 2025 as a reduction in shareholder annuities result was partly offset by improved with-profits.
▶ Find out more on page 26
Dividend per share (ordinary)20.5p
(2024: 20.1p)
Dividend per share is the return of value to shareholders for each share held.
Performance in 2025
The Board has agreed to pay a second interim dividend of 13.8p per share on 30 April 2026, meaning a total dividend of 20.5p per share.
▶ Find out more on page 216
IFRS result after tax£314m
(2024: £(347)m)
Profit/(loss) after tax demonstrates our financial performance to shareholders during the year on an IFRS basis.
Performance in 2025
Profit in 2025 driven by less adverse
short-term fluctuations in investment returns due to the improvement in equity markets and bond yields and lower loss on the mismatch arising on application of IFRS 17.
▶ Find out more on page 27
Key
Key performance measureAlternative performance measure
Linked to Remuneration measures for Executive Directors
Maintain our financial strength Simplify our businessDeliver profitable growth
AUMA and net client flows
Strong positive momentum in net client flows contributes to AUMA growthAssets under management and administration (AUMA) increased by 9% in 2025 to £375.9 billion (2024: £345.9 billion) as a result of favourable market movements and net inflows from open business of £7.8 billion (2024: £1.9 billion
net outflows).
Net flows from open business primarily includes flows from Asset Management, PruFund, Shareholder annuities and advice and have increased following a return to strong net inflows in Asset Management of £7.0 billion (2024: £0.9 billion outflows). Bulk Purchase Annuity (BPA) transactions accelerated in 2025, delivering inflows of £1.5 billion in 2025 (2024: £0.9 billion) and PruFund returned to a net inflow position in the second half of 2025 following improved market conditions, reducing overall net outflows to £0.2 billion (2024: £0.9 billion outflows).
The following table shows an analysis of AUMA and net client flows by segment:
Net client flows For the year ended 31 December Net flows Net flows Total net AUMAi from open business other client flows As at 31 December | ||||||||
2025 £bn | 2024 £bn | 2025 £bn | 2024 £bn | 2025 £bn | 2024 £bn | 2025 £bn | 2024 £bn | |
Institutional Asset Managementii | 4.0 | (0.9) | - | - | 4.0 | (0.9) | 109.0 | 96.1 |
Wholesale Asset Managementii | 3.0 | - | - | - | 3.0 | - | 73.2 | 62.8 |
Other Asset Management | - | - | - | - | - | - | 0.7 | 0.9 |
Asset Managementiii | 7.0 | (0.9) | - | - | 7.0 | (0.9) | 182.9 | 159.8 |
With-profits: PruFund | (0.2) | (0.9) | - | - | (0.2) | (0.9) | 69.8 | 64.0 |
With-profits: traditionaliv | - | - | (5.4) | (4.8) | (5.4) | (4.8) | 64.6 | 61.6 |
Shareholder annuities | 0.4 | (0.2) | - | - | 0.4 | (0.2) | 16.1 | 15.1 |
Other Lifeii, iv | 0.6 | 0.1 | (4.0) | (2.8) | (3.4) | (2.7) | 41.7 | 44.4 |
Life iv | 0.8 | (1.0) | (9.4) | (7.6) | (8.6) | (8.6) | 192.2 | 185.1 |
Corporate assets | - | - | - | - | - | - | 0.8 | 1.0 |
Total | 7.8 | (1.9) | (9.4) | (7.6) | (1.6) | (9.5) | 375.9 | 345.9 |
£20.9 billion (2024: £18.0 billion) of total AUMA relates to assets under advice.
£5.7 billion AUMA relates to M&G Direct, transferred from Life to Asset Management and £2.1 billion Group Investment Linked Plan business transferred from Asset Management to Life. Both transfers took effect from 31 December 2024.
Asset Management AUMA from external clients, does not include £162.3 billion of AUMA of Life that is managed internally (2024: £156.1 billion).
£2.8 billion AUMA previously in Other Life is presented in With-profits: traditional from 1 January 2025 better reflecting the nature of the business.
£3-4bn
Increasing volumes and deal size
£1.5bn
+65%
£0.9bn
£0.6bn +50%
Annual volumes
Long-term capital-light growth deploying With-Profits capital
Launched With-Profits BPA
and closed first deal in Q1 2026
Completed team build-out across origination, proposition and pricing
Launched Value Share BPA
a 'first of its kind' solution in the UK
Milestones Completed first
Bulk Purchase Annuity
deals since 2016
2027
Targets
2026
With-Profits
2025
Build
2024
Innovate
2023
Reopen
Growing Life new business in the corporate pension risk transfer marketAsset Management
Asset Management (external) AUMA increased to
£182.9 billion (2024: £159.8 billion) with net client inflows of
£7.0 billion (2024: £0.9 billion net client outflows) and positive market and other movements of £16.1 billion (2024: £6.5 billion).
Total AUMA for Asset Management, including AUMA of the Life segment managed internally, is £345.2 billion
(2024: £315.9 billion).
2025 2024
£bn £bn
Institutional Asset Management 109.0 96.1
Wholesale Asset Management 73.2 62.8
Other Asset Management 0.7 0.9
Asset Management (external) 182.9159.8
Internal assets 162.3 156.1
Asset Management (including internal) 345.2315.9
Institutional Asset Management net client inflows grew over 2025 to £4.0 billion (2024: £0.9 billion outflows).
International Institutional inflows were £3.9 billion (2024:
£2.9 billion) including a large mandate win in the first half of 2025 and reflecting strengthened net client inflows in our structured credit channel, though these were partly offset by redemptions in South Africa.
Institutional Asset Management in the UK returned to net inflows of £0.1 billion (2024: £3.8 billion net outflows) with success in winning structured credit and fixed income mandates while defined benefit corporate scheme de-risking continued to have an impact.
Institutional AUMA increased £12.9 billion to £109.0 billion as at 31 December 2025 (2024: £96.1 billion) with £2.7 billion of the AUMA increase being due to the acquisition of P Capital Partners (PCP). The improvements in major equity and bond markets in the year also contributed to £6.2 billion of the increased Institutional AUMA.
Our expertise in private assets is a key component of our Institutional investment capability as a resilient, high-margin source of revenues. Our private assets under management increased to £80.8 billion of AUMA as at 31 December 2025 (2024: £74.1 billion) including the acquisition of PCP.
In Wholesale Asset Management, net inflows increased to
£3.0 billion (2024: net nil flows) following strong fund performance, in particular in our European equities funds, with improvements seen over one and five years performance. 67%, 56% and 75% of our Wholesale funds by AUMA ranked in the upper performance quartiles over one, three and five years as of 31 December 2025 (2024: 53%, 63% and 59% over one, three and five years).
Wholesale AUMA increased £10.4 billion to £73.2 billion as at 31 December 2025 (2024: £62.8 billion) benefitting from market and other movements of £7.4 billion, for similar reasons to Institutional.
Life
Net client flows from open business, which primarily comprises PruFund, shareholder annuities and advice, improved to £0.8 billion net inflows (2024: £1.0 billion net outflows) reflecting the BPA transactions which contributed
£1.5 billion inflows and an improvement in PruFund outflows during the year.
PruFund, our insurance-based smoothing solution which offers a blend of public and private investments to clients, had net client outflows of £0.2 billion (2024: £0.9 billion net client outflows). The reduction in net outflows reflects a return to a net inflow position in the second half of the year following a recovery in the markets after volatility earlier in the year.
Shareholder annuities pivoted to net client inflows of
£0.4 billion (2024: £0.2 billion net outflows) bolstered by the BPA transactions in 2025. These inflows are partly offset by the expected outflows from legacy annuities in payment of
£1.1 billion (2024: £1.1 billion).
Total net client flows from the Life business were £8.6 billion outflows (2024: £8.6 billion). As expected, our traditional with-profits business experienced net outflows of £5.4 billion (2024: £4.8 billion). Additionally, increased outflows from our adviser platform business, following our strategic repositioning announced in 2024 and expected run-off from our other small closed books of business offset the net client inflows from open business.
Total Life AUMA increased £7.1 billion to £192.2 billion
(2024: £185.1 billion) with the net client outflows being largely offset by positive market and other movements of £15.7 billion (2024: £5.7 billion, driven by improving equity and
bond markets.
Earnings
The following table shows an analysis of adjusted operating profit before tax by segment: | ||
For the year ended 31 December | 2025 £m | 2024 £m |
Asset Management | 280 | 289 |
Revenue | 1,066 | 1,008 |
Costs | (805) | (774) |
Performance feesi | 15 | 35 |
Investment income and non-controlling interests | 4 | 20 |
Life | 764 | 746 |
With-profits: PruFund | 265 | 226 |
With-profits: traditional | 258 | 222 |
Shareholder annuities | 283 | 308 |
Other Life | (42) | (10) |
Corporate Centre | (206) | (198) |
Adjusted operating profit before tax | 838 | 837 |
Our key metrics to describe our earnings are: Adjusted operating profit before tax (AOP), which demonstrates our longer-term performance to equity holders, excluding the effect of short-term market movements and non-recurring items; Operating change in Contractual Service Margin (CSM), which supplements AOP and includes the impact of new business and management actions not included in AOP; and IFRS result after tax which demonstrates our financial performance to shareholders on an IFRS basis.
Adjusted operating profit before taxAdjusted operating profit before tax remained stable at
£838 million for the year ended 31 December 2025
(2024: £837 million), an improved result in Life offsetting lower adjusted operating profit from Asset Management and Corporate Centre.
Asset Management
Asset Management adjusted operating profit before tax decreased to £280 million (2024: £289 million) following an increase of £27 million in fee-related earningsii driven by growth and continued cost discipline offset by a reduction in performance fees and investment income.
Asset Management revenue increased 6% to £1,066 million for the year ended 31 December 2025 (2024: £1,008 million) and operating costs rose to £805 million (2024: £774 million). The increased revenue reflects the continued focus on growth and includes income earned by P Capital Partners (PCP), which we acquired in June 2025 and BauMont, acquired in October 2024. Our ongoing emphasis on cost discipline has allowed us to absorb the impact of inflation on operating costs and to invest to support growth. Together this means the cost-to-income ratio for the Asset Management business reduced to 75% (2024: 76%).
Revenue earned by Institutional Asset Management was
£383 million (2024: £368 millioniii) including PCP and BauMont revenue and in Wholesale Asset Management, revenue increased to £370 million (2024: £316 millioniii). The increase in Wholesale revenue reflects fees earned on higher average AUMA, in particular equities funds which have seen inflows throughout the year. Internal revenue in respect of assets managed on behalf of Life was £313 million (2024: £324 million).
The average fee margin for Asset Management remained broadly flat at 33 bps for 2025 (2024: 32 bps). In both Institutional and Wholesale the average fee margin was largely unchanged: Institutional 38 bps (2024: 38 bps) and Wholesale
55 bps (2024: 56 bps).
Performance fees includes carried interest which reduced due to a lower number of events that crystallised the recognition of the income. Investment income and non-controlling interests reduced to £4 million (2024: £20 million) with non-controlling interests broadly stable at £(18) million (2024: £(16 million).
Investment income fell £14 million to £22 million reflecting increased foreign exchange revaluation losses as USD weakened against GBP and the impact of lower interest rates. Investment income relates to returns on seed investments, units held to hedge management incentive schemes, interest income on cash balances and any foreign exchange revaluation impacts.
Performance fees are net of the corresponding performance-related remuneration payable under Asset Management employee incentive schemes.
Fee-related earnings are revenue less costs
2024 figures differ to those previously presented as now reflect the amounts excluding internal revenue.
Life
Adjusted operating profit before tax from our Life business increased £18 million to £764 million (2024: £746 million). The improved contribution from with-profits business following an increase in Contractual Service Margin (CSM) release was partly offset by lower expected return on excess assets in shareholder annuities.
With-profits: PruFund
The table below shows a further analysis of the adjusted operating profit before tax from PruFund:
2025 £m | 2024 £m | |
CSM release to adjusted operating profit | 243 | 221 |
Expected return on excess assetsi | 10 | 18 |
Other | 12 | (13) |
PruFund adjusted operating profit before tax 265 226
Excess assets net of financial liabilities.
The Contractual Service Margin (CSM) for PruFund is primarily based on the expected value of future shareholder transfers. The CSM at the start of 2025 was higher than the start of 2024, following the increase in yields over 2024. There has also been an increase in CSM amortisation rate to 11.1% (2024: 10.8%) reflecting a small change in the run-off profile of the PruFund business. These two factors result in an increase in the amount of CSM released to adjusted operating profit to
£243 million (2024: £221 million).
The expected return on excess assets decreased by £8 million to £10 million (2024: £18 million). The expected rate of return is set at the start of the reporting period and a fall in 1-year
risk-free rates over 2024 contributed to a lower expected rate of return in 2025 of 6.2% compared to 6.8% in 2024. The opening value of excess assets in the With-Profits Fund has also fallen following an increase in longer term yield curves over 2024 which has resulted in lower surplus assets being allocated to PruFund. This combined with the lower expected rate of return has driven the decrease in expected return on excess assets.
The improvement in Other of £25 million to £12 million (2024:
£13 million loss) is primarily due to the revaluation of the liability due to the With-Profits Fund in respect of the recovery of transformation costs associated with with-profits new business.
With-profits: traditional
The table below shows a further analysis of the adjusted operating profit before tax from traditional with-profits business:
2025 £m | 2024 £m | |
CSM release to adjusted operating profit | 231 | 198 |
Expected return on excess assets | 31 | 36 |
Other | (4) | (12) |
Traditional with-profits adjusted operating
profit before tax 258 222
As outlined above for PruFund, the CSM for traditional
with-profits at the start of 2025 was higher than at the start of 2024 and similarly there has also been an increase in CSM amortisation rate to 13.1% (2024: 12.8%). The amortisation rate of the traditional with-profits business is greater than PruFund as this business is more mature and is running off faster. As a result the amount of CSM release to adjusted operating profit increased to £231 million (2024: £198 million).
The expected return on the shareholders' share of excess assets in traditional with-profits decreased by £5 million to
£31 million (2024: £36 million) for the same reasons described above for PruFund.
The Other loss of £4 million (2024: £12 million) primarily relates to expense overruns on group pensions new business.
Shareholder annuities
The table below shows a further analysis of the adjusted operating profit before tax from shareholder annuities:
2025 £m | 2024 £m | |
CSM release to adjusted operating profit | 121 | 113 |
Expected return on excess assets | 124 | 147 |
Risk adjustment unwind | 19 | 21 |
Other | 19 | 27 |
Shareholder annuities adjusted operating
profit before tax 283 308
Shareholder annuities adjusted operating profit before tax has decreased by £25 million to £283 million (2024: £308 million). The recurring sources of earnings from the annuity book are primarily the returns on excess assets over and above the IFRS 17 insurance liabilities based on long-term expected investment returns and the release of the CSM.
The expected return on excess assets has decreased by
£23 million to £124 million (2024: £147 million) as a result of a reduction in the expected rate of return and in the value of the excess assets. The expected rate of return is set at the start of the reporting period and reduced from 5.6% for 2024 to 5.2% for 2025, driven by a reduction in the 1-year risk-free rate. The rise in longer-term risk-free rates has driven the reduction in excess assets.
The release of the CSM to adjusted operating profit for shareholder annuities was £121 million compared to £113 million in 2024. The release of the CSM is calculated on the opening CSM adjusted for new business, interest accreted and assumption changes in the period. The CSM released represents 7.8% of the 2025 CSM before amortisation (2024: 7.6%). The release increased in 2025 as a result of
higher opening CSM following longevity assumption changes made in the second half of 2024 and the increase in the amortisation rate.
Other gains fell to £19 million (2024: £27 million). This includes asset trading profits on the matching adjustment portfolio which increased to £35 million (2024: £nil) as a result of actions taken to optimise the portfolio.
This also includes experience variances losses of £19 million (2024: £2 million gain) which include an £8 million payment in relation to a legacy contract and higher than
expected expenses.
Additionally, in the year ended 31 December 2024, a £25 million gain related to a change in persistency assumptions to reflect experience on the lifetime mortgages book.
The credit quality of fixed income assets in the annuity portfolio remained robust over 2025. Approximately 96% of the debt securities held by the shareholder annuity portfolio are investment grade and 74% are A or above. In addition, 80% of the shareholder annuity portfolio is held in debt securities categorised either as Risk Free or Secured (including cash) reflecting a prudent and high-quality asset mix. Credit rating migrations during the year resulted in a moderate level of downgrade experience (defined as movements in notching across all credit ratings and, otherwise, letter downgrades) with less than 9% of bonds in the shareholder annuity portfolio subject to a downgrade, this is partly offset by upgrades across 4% of the credit portfolio.
Other Life
2025 2024
£m £m
Platform and advice (28) (31)
Europe (13) -
Other (1) 21
Other Life adjusted operating profit before
tax (42) (10)
Other Life losses increased by £32 million to £42 million (2024:
£10 million loss). Platform and advice losses reduced slightly due to lower costs.
Europe includes a loss of £26 million as a result of the increase in provision under an agreement to reimburse the With-Profits Fund for its contribution to the costs for growing the business written in Poland due to an increase in expected expenses and lower expected future sales. This more than offsets the profit of £13 million on other European business. In 2024 profit of £11 million was offset by a one-off £11 million loss from the impact of modelling developments.
In Other, one-off items in 2024 included greater interest income and higher gains from service companies, including the release of a legacy provision.
Corporate Centre
The loss in Corporate Centre has increased by £8 million to £206 million (2024: £198 million). A reduction in interest income and profit from our treasury operations was partly
offset by lower finance costs on subordinated debt, following repurchase and redemption of the subordinated notes in June and July 2024. Underlying Head Office expenses increased slightly to £101 million (2024: £98 million).
Operating change in Contractual Service Margin (CSM)For the year ended 31 December | With-profits: PruFund | With-profits: traditional | Shareholder annuities | Other | Total | ||
2025 2024 £m £m | 2025 2024 £m £m | 2025 2024 £m £m | 2025 £m | 2024 £m | 2025 £m | 2024 £m |
The following table shows a breakdown of the operating change in CSM:
Interest accreted on the CSM | - | - | - | - | 38 | 37 | 6 | 7 | 44 | 44 |
Expected real-world return | 302 | 320 | 259 | 272 | - | - | - | - | 561 | 592 |
Release of CSM to adjusted operating profit | (243) | (221) | (231) | (198) | (121) | (113) | (17) | (17) | (612) | (549) |
New business | 111 | 71 | - | - | 23 | 17 | 10 | 12 | 144 | 100 |
Assumption changes and variances | 15 | (71) | (25) | (51) | 117 | 231 | 2 | (2) | 109 | 107 |
Operating change in CSM | 185 | 99 | 3 | 23 | 57 | 172 | 1 | - | 246 | 294 |
Operating change in CSM decreased to £246 million in the year ended 31 December 2025 (2024: £294 million) with a reduction in shareholder annuities partly offset by an increase in the result for PruFund.
The main elements of the operating change in CSM are expected real-world return for with-profits business, new business contribution and assumption changes and variances. These are then offset by the release of the CSM to adjusted operating profit.
For with-profits expected real-world return, the expected rate of return is determined at the start of the year and is applied to the Variable Feei. The Variable Fee increased in the year and the expected rate of return decreased to 7.8% for 2025 (2024: 8.2%), driven by a reduction in the 1-year risk-free rate. New business contribution is based on the projected future shareholder transfer on new inflows valued at the opening risk-free rate.
For shareholder annuities, interest accreted on the CSM is based on the opening CSM including new business and assumption changes and variances. The interest rate is based on the forward curve 'locked in' at IFRS 17 transition date
(1 January 2022) and has slightly reduced to 2.2%
(2024: 2.3%) due to a small decrease in the five-year point on the curve.
With-profits: PruFund
PruFund new business contribution to the CSM increased to
£111 million (2024: £71 million). The rise is predominantly due to an increase in the projected future shareholder transfers driven by a rise in longer-term risk-free rates over 2024, with a smaller impact from increased gross inflows into PruFund.
Assumption changes and variances resulted in gains of
£15 million (2024: £71 million loss), including benefits from modelling improvements and asset allocation. The loss in 2024 is primarily a result of a reduction in projected future shareholder transfers following a full rebuild of our prospective with-profits modelling in 2024.
The expected real-world return for PruFund business reduced to £302 million (2024: £320 million) as the lower expected rate of return more than offset the rise in Variable Fee.
With-profits: traditional
A loss in 2025 of £25 million (2024: £51 million) from assumption changes and variances includes the impact of weakened persistency assumptions relating to retirement rates and the result of improvements in prospective
with-profits modelling for future bonus rates.
Similar to PruFund, the loss in 2024 was mainly due to the full rebuild of our prospective with-profits modelling, the impact was smaller than for PruFund as the traditional book is less sensitive to changes in the future investment return.
The expected real-world return decreased to £259 million (2024: £272 million) for same reasons as for PruFund.
Shareholder annuities
Gains from assumption changes and variances in 2025 of
£117 million (2024: £231 million) include £158 million longevity assumption changes, compared with the impact in 2024 of
£244 million. The negative impact of increased investment management expense assumptions is partly offset by risk adjustment benefits resulting in an additional £41 million loss in the year.
The contribution from new business to the operating change in CSM includes the bulk purchase annuity transactions completed and internal vestings on existing business. During 2025 this increased to £23 million (2024: £17 million) primarily as a result of the bulk purchase annuity transactions completed in 2025.
The Variable Fee is the amount of the Group's share of the fair value of the underlying items less fulfilment cash flows that do not vary based on the returns on underlying items. Further information is provided in Note 1.5.
The IFRS result after tax attributable to equity holders for the year ended 31 December 2025 is a profit of £314 million (2024:
£347 million loss). Adjusted operating profit before tax has been offset by losses on non-operating items predominately from short-term fluctuations in investment returns.
Losses from short-term fluctuations in investment returns reduced significantly in 2025 to £164 million (2024: £643 million). The losses primarily comprise a £66 million loss (2024:
£247 million loss) in relation to shareholder annuities including the difference in actual and expected long-term investment return on surplus assets backing the portfolio which has decreased as the rise in yields of longer duration was smaller in 2025 relative to 2024. This rise in yields also resulted in a lower loss of £34 million (2024: £227 million loss) on interest rate swaps purchased to protect PAC's Solvency II capital position against falls in interest rates. Additionally, there was a
£174 million loss (2024: £98 million loss) on the hedging
The following table shows a reconciliation of adjusted operating profit before tax to IFRS result:
For the year ended 31 December | 2025 £m | 2024 £m |
Adjusted operating profit before tax | 838 | 837 |
Short-term fluctuations in investment returns | (164) | (643) |
Mismatches arising on application of IFRS 17 | (106) | (333) |
Amortisation and impairment of intangible assets acquired in business combinations | (52) | (115) |
(Loss)/profit on disposal of business and corporate transactions | (5) | 11 |
Restructuring costs and otheri | (90) | (106) |
IFRS profit/(loss) before tax and non-controlling interests attributable to equity holders | 421 | (349) |
IFRS profit attributable to non-controlling interests | 18 | 17 |
IFRS profit/(loss) before tax attributable to equity holders | 439 | (332) |
Tax charge attributable to equity holders | (125) | (15) |
IFRS profit/(loss) after tax attributable to equity holders | 314 | (347) |
Restructuring and other costs excluded from adjusted operating profit relate to transformation costs allocated to the shareholder. These differ to restructuring costs included in the analysis of administrative and other expenses in Note 7 which include costs allocated to the With-Profits Fund.
instruments held to protect the Solvency II capital position from falling equity markets, due to rising equity markets in both years. This was partly offset by £30 million of foreign exchange gains (2024: £8 million losses) on the USD denominated subordinated loan note due to weakening of the currency against GBP over 2025.
Mismatches arising on application of IFRS 17 primarily relates to a mismatch which occurs in relation to non-profits businesses in the With-Profits Fund generating a £61 million loss in 2025 (2024: £239 million loss). This mismatch reduced in 2025 due to a smaller benefit from longevity assumption changes compared with 2024. 2024 also included a reduction in the fair value of non-profit annuity business in the With-Profits Fund due to Solvency UK reforms which increased the mismatch, this has not repeated in 2025. Over the expected term of the contracts this mismatch is expected to slowly unwind as the profit on non-profit business in the With-Profits Fund is recognised. Additionally, the mismatch for annuities due to divergence between the locked-in rate used to value the CSM and the valuation discount rate of £47 million in 2025 (2024: £89 million) decreased mainly due to a lower longevity assumption impact in 2025.
Amortisation and impairment of intangible assets of
£52 million (2024: £115 million) includes £33 million (2024:
£30 million) impairment of responsAbility as described in Note 13 of the notes to the Consolidated financial statements. In 2024, £79 million impairment was in relation to our platform, advice and model portfolio service businesses.
In the year ended 31 December 2025, restructuring costs and other of £90 million (2024: £106 million) includes £27 million (2024: £44 million) in relation to actions taken to reduce our cost base and £22 million (2024: £21 million) of investment spend in building out capacity in our Asset Management business. Restructuring costs also includes £19 million (2024:
£nil) in relation to the Group's Financial Crime Enhancement Programme described on page 57.
The equity holders' tax charge for the year ended 31 December 2025 is £125 million (2024: £15 million)
representing an effective tax rate of 28.5% (2024: (4.5)%). Excluding non-recurring items, the equity holders' effective tax rate is 26.4% (2024: 12.0%). The equity holders' effective tax rate represents a tax charge on the equity holders' pre-tax profit. This rate diverges from the anticipated tax charge at the UK statutory effective rate of 25.0% (2024: 25.0%), mainly due to the adverse effects of non-deductible expenses and differences in the taxation of the life insurance business and partly offset by the beneficial effect of utilisation and recognition of tax losses on which no deferred tax was previously recognised.
Capital and liquidity
The following table shows an analysis of total capital generation: | ||
For the year ended 31 December | 2025 £m | 2024 £m |
Asset Management | 275 | 261 |
Life | 478 | 616 |
Corporate Centre | (224) | (233) |
Underlying capital generation | 529 | 644 |
Other operating capital generation | 236 | 289 |
Operating capital generation | 765 | 933 |
Market movements | 49 | (59) |
Restructuring and other | (127) | (135) |
Tax | 146 | 153 |
Eligible own funds restriction reversal | - | 216 |
Total capital generation | 833 | 1,108 |
Underlying capital generation of £529 million (2024: £644 million and operating capital generation of £765 million (2024:
£933 million) remain resilient and reflect the capital deployed to support bulk purchase annuities written in the year.
Total capital generation was £833 million for the year ended 31 December 2025 (2024: £1,108 million) with 2024 benefitting from the reversal of an eligible own funds restriction.
Underlying capital generation
Underlying capital generation decreased in the year ended
31 December 2025 to £529 million (2024: £644 million) reflecting a £105 million reduction in shareholder annuities partly offset by improved results from Asset Management and Corporate Centre.
For the year ended 31 December | 2025 £m | 2024 £m |
Asset Management | 275 | 261 |
Life | 478 | 616 |
With-profits: PruFund 234 239
In-force 251 264
New business (17) (25)
With-profits: traditional 174 190
- In-force | 226 | 261 |
- New business | (134) | (64) |
Shareholder annuities 92 197
Other Life (22) (10)
Corporate Centre (224) (233)
Underlying capital generation 529644
In Asset Management, underlying capital generation increased to £275 million (2024: £261 million) benefitting from higher revenue and a capital release from reduced market risk.
Underlying capital generation from PruFund reduced marginally to £234 million (2024: £239 million). In-force business generated £251 million (2024: £264 million) reflecting the impact of reductions in the expected real-world return on shareholder transfers from 8.2% pa in 2024 to 7.8% pa in 2025. New business strain from the PruFund business has decreased to £17 million (2024: £25 million) due to an increase in the value of future shareholder transfers following the increase in long-term risk free rates over 2024, partly offset by gross inflows during the year.
Traditional with-profits business generated underlying capital of £174 million (2024: £190 million). The decrease in underlying capital generation is driven by the impact of reductions in the expected real-world return on the present value of shareholder transfers, as noted for PruFund.
Shareholder annuities underlying capital generation reduced to £92 million (2024: £197 million). This includes an increase of £70 million to £134 million (2024: £64 million) in the capital strain from the completion of £1.5 billion (2024: £0.9 billion) new bulk purchase annuities transactions. In addition there was a reduction in the expected return due to lower surplus assets in the annuity portfolio and a lower expected rate
of return.
The negative contribution from Other Life has increased in 2025 to £22 million from £10 million in 2024. Other life includes the expected return on interest rate swaps, designed to protect the Solvency II capital position in a falling interest rate environment which has reduced due to rising risk-free rates over 2024.
Corporate Centre negative contribution has improved including the impact of a reduction in the debt coupon payments following the subordinated debt deleveraging actions taken in 2024 and a release of capital held by our Treasury function in respect of credit risk.
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M&G plc published this content on March 26, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on March 26, 2026 at 10:21 UTC.
