Royal London, the UK’s biggest insurance mutual which employs over 1000 in Edinburgh, has continued to benefit from the government’s pension reforms with another big rise in new business.

The former Scottish Life pensions business based in Edinburgh recorded a huge two-thirds rise in group pensions, from £1.1bn a year ago to £1.9bn, driven by auto-enrolment.

That helped the group rack up a record first-half £4.2bn of new life and pension sales, and an operating profit up 20per cent at £138m.

The company said: “An approach to setting up automatic enrolment schemes based on personal contact rather than employer self-service means that Royal London continues to attract good quality business.”

It said it was attracting new business from schemes “set up with other providers earlier in the automatic enrolment process”.

It expects growth to slow down once once smaller schemes have enrolled and the initial auto-enrolment staging process comes to an end.

Individual pensions and drawdown was up 17 per cent at £1.78bn.

Phil Loney, chief executive, said: “We are announcing a strong set of results delivered against the uncertain backdrop of the UK referendum on EU membership and continuing low interest rates."

The company closed its own final salary scheme to new contributions five months ago, creating a one-off £21m gain, as an “important step in managing our costs and capital requirements”.

It said all employees were being encouraged to join one of the group’s personal pensions.

A spokesman said the company offered a double matching contribution up to 14per cent of salary and, with salary sacrifice, the pension cost to the company for an employee could be more than it was the final salary scheme.

Protection insurance sold through advisers, a business also based in Edinburgh, registered a 24per cent rise to £287m, and made headway in Ireland with a new digital service.

The new direct to consumer division, launched two years ago, almost doubled new business to £160m.

Royal London said its over-50s plan, set up as a better-value competitor to market leader Sun Life, had “taken market share from established market participants…it is an innovative and value for money product which is proving popular with its target market”.

It cited strong sales growth from distribution partnerships with Cooperative Funeral Services and Ecclesiastical Insurance in the pre-paid funeral plan market, and added: “We continue to seek further strategic distribution partnerships with consumer-orientated organisations who share our objective of delivering better value for customers.”

The Ascentric wrap platform increased assets under administration by seven per cent to £10.8bn. Royal London Asset Management attracted gross inflows of £2.3bn , up from £1.9bn.

Mr Loney said “Royal London continues to build its scale in the UK and Irish markets by offering a differentiated proposition rooted in our customer owned business model.

"Strong trading performance enables us to support record levels of investment in our business, with a strong capital position and growing operating profits for the benefit of our members."

He added: "2016 sees the extension of our innovative profit sharing arrangements to eligible pension customers and members.

"By offering a vibrant mutual alternative Royal London creates value directly for its own customers but also indirectly for all consumers through its competitive influence.”