Standard Life was forced to fight off suggestions yesterday that it was becoming over-reliant on a single savings product as it crashed through first-half sales forecasts thanks to the surging success of self-invested personal pensions (Sipps).

Britain’s fifth-largest insurer also failed to dampen speculation that it was considering a bid for Resolution, the closed life funds group that is trying to merge with Friends Provident.

David Nish, the finance director, played down the bid talk, despite speculation that Standard Life and Resolution had held informal talks about a merger several weeks ago.

“It’s our consistent policy that we don’t comment on speculation regarding M&A. It arises from time to time, particularly regarding recent transactions,” he said.

Sales of individual Sipps soared 82 per cent to more than £2.5 billion in the first half. Sipps are pension products aimed primarily at high earners who want a wide-ranging choice of investments.

Mr Nish had to contend with analyst suggestions that the insurer could become overreliant on one income stream. Some speculated that this could force it to explore alternative growth areas, such as through mergers and acquisitions.

Barrie Corne, analyst at Panmure Gordon, described Standard’s Sipps sales as “hugely impressive”, but he said: “We are concerned by its reliance on this [one] particular product. Such concerns could account for the speculation that it is considering disrupting the Resolution/Friends Provident merger.”

Blair Stewart, an analyst for Standard’s house broker Merrill Lynch, said that any move to dilute the insurer’s strong organic growth would have to be “carefully explained”.

Mr Nish said: “We’re not sitting here worrying that Sipps could run out of steam. We think there has been a shift in the way consumers think about the value of their assets. We see the whole thing about Sipp as being about a fundamental product offering. We are genuinely a long-term savings business and all we are creating is a mechanism to access savings.”

Standard Life’s finance chief promised that there would be a “significant increase” in profit margins in the UK over the first half, driven by Sipps volumes. Standard Life has 36,800 individual Sipps customers with savings worth an average of £172,000 each. Sales of group pensions, up 49 per cent at almost £1.5 billion, were also fuelled by Sipp products.

Sipps have been available as a long-terms savings product since 2001, but have become increasingly popular as a tax-efficient pension product in the wake of last year’s government-led A-Day liberalisation of the saving markets.

Mr Nish said that margins on Sipps were healthy and it was not a capital or personnel-intensive business. He said that there was plenty of potential to take on new customers and was comfortable with the idea of 500,000 customers holding Sipps assets worth £100 billion. Shares in Standard Life closed up 11p at 326p.

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