Royal London, the leading insurance mutual and a big employer in Scotland, is reaping the rewards of pension reforms with a 40 per cent rise in new business.

The former Scottish Life pensions arm piled on a 16per cent increase in workplace pensions and a 68per cent uplift in individual pensions in the year to March 31.

Phil Loney, chief executive, said the company's top three position in pension drawdown had helped business accelerate as the freedoms to cash in personal pensions arrived last month. Mr Loney called for a merger of the Money Advice Service and the Pensions Advisory Service into a single effective agency to fill the advice gap for people at retirement.

But he said most customers' pension decisions since April 6 appeared sensible and they had "not seen any Lamborghinis" - referring to the much-quoted aside from former pensions minister Steve Webb that people could buy one if they chose.

Royal London's total new life and pensions business was up 40 per cent to £1.38billion, with drawdown up by two-thirds to £244m adding to almost £1bn of pensions business split between group (£515m) and individual (£474m).

Protection insurance from Scottish Provident and Bright Grey, which will disappear into the Royal London brand later this year, was up by a third to £107m, while the new direct to consumer protection venture chipped in £5m, five times its early total a year ago.

Mr Loney said the insurer had processed 9000 requests for people to take cash out of their pension in the past few weeks. "Very few of those customers have been anywhere near the Pensions Advisory Service, we need to build a real prominent trusted brand with the public that provides financial guidance and education." That service was performing extremely well, Mr Loney said, and could benefit from the resources of the Money Advice Service in a merged operation.

He went on: "On the whole people have been making pretty sensible decisions."

The main trends were people taking advantage of the higher £10,000 threshold to cash in the smallest pots, withdrawing lump sums earlier than they were previously able to do, and moving to flexible access drawdown in order to vary their cash needs year by year.

Mr Loney said Royal London was providing some of the new competition in the market for workplace pensions, which the Office of Fair Trading had last year criticized for being too static. "A lot of those pensions have been locked up in the back books of the likes of Prudential or Scottish Widows, and now people are getting lower charges and better service."

The group's £86bn asset management arm added £111m of net new assets, after £920m last year, but Mr Loney said it followed two extraordinary years and the business was "still growing".

Its Ascentric wrap platform increased assets by 7 per cent to £9.5bn, just ahead of Nucleus and Alliance Trust Savings which has a £45bn target for 2020. Mr Loney commented: "I don't think we will see large amounts of consolidation with platforms buying each other and shifting the assets. It will be a long war of attrition, and those with deep pockets and big insurance companies behind them have an advantage."

But he said Ascentric was only now breaking even. "The platform market is growing but there is plenty of competition and very little profit emerging."