Scottish Friendly has announced plans to acquire the pension and annuity in payment books of business from Fidelity International, subject to regulatory approval.

The acquisition consists of a block of unit-linked Section 32 pensions business, which includes £2.16bn in assets under management (AUM) across 76 originating schemes, covering approximately 40,000 policyholders.

This is alongside an in-payment annuities portfolio with liabilities of £6.6m and around 1,000 annuitants as of 31 December 2024.

As a result, Scottish Friendly’s assets under management (AUM) are set to increase by £2.16bn to over £6.3bn.

Subject to regulatory approval, the acquisition and transfer of customers to Scottish Friendly, is expected to complete by the end of September 2026. 

Under the terms, members of the Section 32 business will remain part of FutureWise, Fidelity International’s default investment strategy for UK-based workplace pension schemes, for the next 20 years. 

Scottish Friendly said that this deal will further strengthen its pension capabilities, with chief executive, Stephen McGee, highlighting the deal as a “significant” acquisition for Scottish Friendly, growing its business and offering long-term value for its eligible members.

“We are committed to helping our customers and their families achieve financial well-being through friendly products and customer care,” he said.

“For customers transferring to us, we will ensure they receive the service and support they need during this period and beyond.

“I am delighted that Fidelity International has chosen Scottish Friendly as a credible partner and has entrusted us with its customers.

“Winning the tender process is a significant achievement and I look forward to welcoming customers to Scottish Friendly when the deal completes.”

Adding to this, Fidelity International head of global platform solutions, Stuart Warner, said that Fidelity International is committed to improving its workplace investing operator model, to deliver the best possible customer experience and retirement outcomes for its clients and members.

He explained that the acquisition of its Section 32 pensions business by Scottish Friendly will support the delivery of this strategy.

“Scottish Friendly has significant experience in acquisitions such as these, and we look forward to working closely with them to support members through this transition,” he said.

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