2025 Investment Firms Prudential Regime (MIFIDPRU 8) Remuneration Disclosure
The following disclosures are made in accordance with the Financial Conduct Authority (FCA) Prudential Sourcebook for Investment Firms Chapter 8 (MIFIDPRU 8) in respect of the following Non-Small and Non-Interconnected MIFIDPRU investment firms within The Royal London Mutual Insurance Society and its subsidiaries (the Group), which are subject to the ‘standard’ remuneration requirements:
- Royal London Asset Management Limited (RLAM)
- Royal London Savings Limited (RLS)
The remuneration disclosure is based on the financial year ending 31 December 2025. This information is updated on an annual basis.
Remuneration decision-making
The Group has a Remuneration Committee (the Committee) consisting of Non-Executive Directors advised by independent remuneration consultants. The Committee has overall responsibility for the Remuneration Policy across the Group companies. The Committee’s Terms of Reference are available on the Royal London website [1].
The Committee receives regular updates, reports and support from internal groups including, but not limited to, Group Risk and Compliance and Group Internal Audit. The Group Chief Risk Officer reports how effective Royal London and its subsidiaries have been in managing risk within the Group’s risk profile.
The Committee receives independent remuneration advice on matters in relation to executive and colleague remuneration. In 2025, the Committee was advised by Deloitte LLP, primarily in relation to executive director and senior management remuneration, variable remuneration, the Remuneration Policy and trends in the external market including legislative and regulatory developments.
Link between pay and performance
The Group’s variable remuneration plans are designed to reward colleagues for their performance and contribution to the success of their business unit and the Group. These include the Short-Term Incentive Plan (STIP), the Long-Term Incentive Plan (LTIP) and sales incentives.
In determining STIP awards there are three factors which impact the overall level awarded:
- Royal London Group performance – how well the Group performs against the Group Scorecard will determine the STIP funding available and is based on a mix of financial and non-financial measures.
- Business unit/function performance – in order to increase alignment with the underlying performance of certain business units or functions, separate STIP scorecards may apply for certain colleagues or business areas. RLAM has a separate scorecard to assess performance across the year. Performance measures include financial (profit revenue and investment performance) and non-financial (people, assurance, climate). In addition, Control Functions have separate scorecards which determine the funding for colleagues in these functions.
- Personal performance – each colleague is awarded an ‘On-Track’ or ‘Off-Track’ performance rating which reflects their performance and overall contribution to the success of the business and informs their STIP awards. Individual performance is assessed against a range of measures depending on the nature of the role. These may include fund performance, sales and behaviours.
A description of the STIP and LTIP, including the financial and non-financial measures in the Group scorecards, is included in the Royal London Annual Report and Accounts [2].
Remuneration structure
All colleagues are remunerated with fixed pay (salary, pension and benefits) and are eligible to be considered for performance related variable pay (STIP and LTIP as appropriate), which may be a greater proportion of total reward than fixed salary.
All variable amounts are distributed as cash, apart from awards deferred under the STIP and the LTIP where awards are invested in and converted into units within an RLAM Fund.
Colleagues in certain roles are eligible to participate in variable remuneration plans that differ from the STIP or LTIP. Some sales-focused roles across the Group participate in Sales Incentive Plans. All variable remuneration plans in Royal London are subject to governance and oversight procedures, and reviewed annually, and total variable pay outcomes are capped in line with the Group’s Remuneration Policy.
The structure of the remuneration packages for Material Risk Takers (MRTs) and Identified Staff is designed to be in line with the Group’s business strategy, take account of any conflicts of interest and align with the existing and future capital requirements of the business. The Group’s variable remuneration plans are designed so they do not encourage excessive risk taking. Further information on variable remuneration plans is contained in the Royal London Annual Report and Accounts [2].
Risk/Performance adjustments
The Group operates a risk adjustment process. Risk adjustment is any downward adjustment (collective or individual) made to variable remuneration. This includes both the STIP and LTIP along with any other variable remuneration arrangement that may operate from time to time.
There are two types of risk adjustment:
1. Ex-ante risk adjustment
The Group identifies its key current and future risks (which include an assessment of the Group’s position against the following risk appetite categories: Insurance, Capital, Liquidity, Conduct, Legal & Regulatory, Financial Crime, Third-party, Change Management, Operational Resilience, Information Security, Information Technology, Processing and People), monitors and measures them, and uses this assessment to determine whether an adjustment to the STIP pool is required to account for year-on-year changes in risk taken (i.e. where the level of risk taken has materially increased for a certain level of performance achieved, a downwards adjustment would be considered).
Ex-ante adjustments would be made collectively (at a Group-wide, business unit or functional level) and based on forecast risks.
2. Ex-post risk adjustment
Ex-post adjustments may be collective (Group-wide, business unit or function level) or individual adjustments.
Risk events and issues are identified and monitored continuously by the Group Risk and Compliance function and the Group Internal Audit function. This information is collated and used to assess whether a collective or individual adjustment is appropriate based on the issues or events identified throughout the year.
In addition, all variable remuneration is subject to malus and clawback provisions.
The STIP and LTIP plan rules include malus and clawback provisions which enable the Remuneration Committee to impose further conditions on any variable remuneration opportunity and/or award; or reduce (including to nil) the award opportunity and/or number of fund units by reference to which a payment or award is calculated at any time before the end of the recovery period, which is three years (under the STIP) or five years (under the LTIP) from the date of award.
Further information on malus and clawback is contained in the Royal London Annual Report and Accounts [2].
Guaranteed Variable Remuneration
The Remuneration Policy includes provisions related to guaranteed variable remuneration.
Buy-out awards are designed to compensate new colleagues for the loss of existing awards that would be forfeited on joining the Group and closely replicate the terms of the forgone awards. Any buy-out award will consider the terms of the original award, in particular any performance conditions and the time period over which they would vest. At the point a buy-out award is put in place, the value of any award will not be more favourable in terms of value or conditions than the award being forfeited.
Guaranteed variable remuneration awards are only permitted in exceptional circumstances where their provision is required to recruit or retain an individual. They are not routinely awarded. For MRTs and Identified Staff, guaranteed variable remuneration is restricted to the first year of a colleague’s employment in the context of their hire, and will only be considered when the Group has a strong capital base.
Severance Pay
Colleagues who leave the Group will receive payments in line with statutory requirements, relevant policies and any contractual arrangements.
Any severance payments made to colleagues leaving the Group will meet regulatory and legislative requirements and will not be used to reward failure or misconduct. Any termination arrangements outside of contractual requirements, standard leaver provisions and/or redundancy terms for MRTs and Identified Staff are subject to Remuneration Committee approval.
The following illustrative criteria may be considered for the purposes of determining the amount of a severance payment (but not limited to):
- the reasons for the early cessation of employment
- the length of an individual’s service with the Group
- the seniority of the individual’s role within the Group.
Quantitative remuneration disclosures
In 2025, 82* individuals were designated as ‘Identified Staff’ for the Group entities highlighted above.
Identified Staff designations are approved by the Remuneration Committee with reference to the criteria set out in applicable regulations, including the FCA’s MIFIDPRU Remuneration Code. The Group has established an identification framework and process for this purpose.
Identified Staff include Non-Executive Directors, Executive Directors, and members of Committees with oversight of the activities of these firms, senior management, control function heads and those individuals whose professional activities have a material impact on the firm's risk profile or the assets managed. In addition to the regulatory categories, the Group also considers additional firm-wide criteria, including those who pose a material conduct and reputational risk to the firm based on risk-taking authority and decision-making responsibility. The Remuneration Committee approves remuneration structures and outcomes for all Identified Staff, to ensure they remain within the risk profiles for each of the respective entities.
In respect of the financial year ending 31 December 2025, the total aggregate remuneration [3] split between Senior Management [4], Other Identified Staff and All Staff is illustrated in the table below.
| RLAM | RLS | |||||||
| Senior Management | Other Identified Staff | Other Staff | Total Staff | Senior Management | Other Identified Staff | Other Staff | Total Staff | |
| Fixed remuneration (£) | £3.71m | £11.82m | £56.11m | £71.63m | £0.96m | £2.06m | £1.85m | £4.86m |
| Variable remuneration (£) | £6.25m | £19.39m | £27.23m | £52.87m | £0.75m | £4.36m | £1.02m | £6.13m |
| Total remuneration (£) | £9.95m | £31.21m | £83.34m | £124.50m | £1.71m | £6.42m | £2.87m | £10.99m |
*This number references the number of named individuals identified for the relevant Group entities listed above. Some individuals may be included as Identified Staff for both entities due to the nature of their role and responsibilities.
Information on any guaranteed variable remuneration and severance payments awarded to RLAM Identified Staff [5] for the financial year ending 31 December 2025 is shown in the table below. No guaranteed variable remuneration or severance payments were awarded to RLS Identified Staff for the financial year ending 31 December 2025.
RLAM Identified Staff
| Guaranteed variable remuneration: | |
| Number of Identified Staff | 6 |
| Total amount (£) | £738,815 |
| Highest severance payment that has been awarded to an individual that is Identified Staff | £112,000 |
Footnotes
[1] Royal London Group Remuneration Committee Terms of Reference.
[2] 2025 Royal London Annual Report and Accounts.
[3] This figure is comprised of basic salary, allowances and pension related benefits, STIP, LTIP, any buy-out or retention awards, severance pay, referral payments, and annual fees for Non-Executive Directors. LTIP awards are subject to performance conditions. However, they have been valued at their initial maximum grant value for the purpose of this table.
[4] Senior Management refers to any Directors or Executive Committee members for these entities. Annual fees for Non-Executive Directors have also been used to calculate fixed remuneration.
[5] In accordance with MIFIDPRU 8.6.8 (7), disclosures on guaranteed variable remuneration for Senior Management and Other Identified Staff have been aggregated to prevent individual identification of MRTs. For the same reason, the disclosure item under MIFIDPRU 8.6.8 (5) (b) relating to severance payments has not been included.