The ABI said the results reinforced its view that the best way to proceed with pensions was to build on the existing framework rather than introduce new alternatives to employer contributions.

Total new pensions business increased by 13 per cent throughout 2005, totalling £11.6 billion.

Meanwhile, new business in the final quarter of 2005 showed an increase of 16 per cent year-on-year, with a particularly strong showing from employer-sponsored stakeholder pensions, which were up by 24 per cent.

However, sales of regular premium individual pensions dropped over the quarter, perhaps reflecting current concerns over the future of the industry as pensions A-day approaches.

Chris Kenny, ABI director of life and pensions, said: “The ABI figures show continued steady growth in the long-term savings market.

“Such growth shows that both individuals and their employers are willing to contribute to pension schemes through the workplace.”

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