SAVERS eager to escape rock-bottom interest rates are moving money into investment products with Edinburgh-based Standard Life, although the group missed first half profit expectations thanks in part to efforts to revamp its Canadian arm.

Standard Life saw operating profits rise 6% to £304 million in the six months to the end of June, driven by a 28% surge in earnings from its core UK business.

Operating profits were also up 37% at its fund management arm Standard Life Investments (SLI).

But total earnings were 5% below what the market had anticipated as the group was hit by a fall in profits in Canada and increased interest expenses.

In contrast, new business sales were 4% ahead of consensus at £12.2 billion .

Group overall flows, including money into SLI, totalled £6.5bn for the six months, exceeding the £5bn the group took in whole of 2012. However, the rise is slightly flattered by Standard Life's loss of a large mandate early last year.

Speaking a day after new Bank of England Governor Mark Carney effectively confirmed base rates would remain at record low level for years to come, Standard Life chief executive David Nish said: "There is momentum building in changing asset classes."

The group recorded higher retail sales in the second quarter of the year than the first, he said.

Paul Matthews, chief executive of Standard Life's UK and European business, said: "What we are seeing is a lot of customers out there looking for where they can get a return."

SLI chief executive Keith Skeoch said the Bank of England's indication that rates are unlikely to rise for some years would lead investors to lengthen their investment horizons.

Holding rates down improves the return available on riskier assets such as property and equities, he said.

However, he warned of a problem of market volatility when interest rates do eventually shift.

"On balance it is a good thing," he said of Mr Carney's decision to issue forward guidance.

Mr Nish confirmed he has hired a headhunter to find a replacement for finance director Jackie Hunt who has quit to join rival Prudential, but sought to put a positive loss on the move.

"It is another great opportunity to us to either bring talent into the group or develop talent within the group," he said.

"The machine rolls on," he added.

Mr Skeoch said of the recent defection of SLI's head of multi-asset investing Euan Munro to Aviva that "no single person is bigger than the team."

He added: "That includes me."

The gradual introduction of auto-enrolment, where employees have to actively opt out of a company scheme, has seen Standard Life add 97,622 employees to its books.

It expects to implement 300 schemes over the year and another 3000 in 2014 as smaller employers are brought into the system.

At Standard Life Investments operating profits hit £93m in the first half of 2013, up from £68 for the same period last year.

The third party inflows of £7.1 bn were 32% higher than expected and were accompanied by an increasing diversification of its client base, with more than half of third party net inflows coming from outside the UK.

In Canada, Mr Nish is seeking to move the business away from its reliance on selling traditional but less profitable guaranteed products towards pensions and non-guaranteed investment products.

Standard Life's bottom line was also hit by increased interest costs after it issued new debt at the end of last year.

Standard Life's shares fell 9.9p or 2.6% to 377.5p but are still up 13.3% in the year to date.

The company is proposing an interim dividend of 5.22p, up 6.5% on last year, to be paid on October 29.