THE chief executive of M&GPrudential, John Foley, has underlined the savings and investment giant’s commitment to Scotland.

He indicated Scotland is set to be a big beneficiary of moves by M&GPrudential directors to ensure the firm is in the right shape to respond to changes in the way people save for retirement and access products.

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The company has completed a big investment programme in preparation for a demerger that will see it separated from Prudential’s operations focused on Asia , the US and Africa.

Mr Foley noted M&GPrudential is making a substantial investment in Scotland under an office rationalisation programme that will result in the closure of four offices in England.

The plan unveiled in June will leave the firm with bases in Edinburgh, Stirling and London.

M&GPrudential expects to have around 1,700 employees in Scotland when the programme is complete.

Mr Foley dismissed suggestions the decision to concentrate work in Scotland had been made on cost grounds, noting the importance of factors such as the skills mix on offer in the country.

“We look at it in terms of talent pool,” he said, adding: “It’s convenient for the business; we have good communication links.”

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The company has chosen Edinburgh to be the centre of its digital operations under an investment programme Mr Foley expects to put it into a position to lead the way in terms of innovation.

This could result in the transformation of the way in which the firm makes sales and in the completion of associated administration and customer services work.

“I go there and it certainly does not feel like the Prudential of the past,” said Mr Foley of the company’s Edinburgh office. “It is vibrant, go-go, lots of young people throwing things around.”

The Stirling operation is home to functions such as finance and human resources as well as pensions administration staff.

Mr Foley said M&GPrudential is considering whether to revamp its Craigforth complex in Stirling or develop a new office in the area.

Signalling the company’s long term commitment to Stirling, Mr Foley said he thought it would still employ large numbers of people there in ten or 15 years. However, they may be doing different work from the employees of today.

For example, Mr Foley noted the potential to use technology to speed up work on consolidating the pension savings of people with a number of schemes. The firm could communicate with customers using Skype video-conferencing facilities.

In August M&GPrudential said it would cut 84 wealth solutions jobs, primarily from Craigforth, citing changing role requirements.

Mr Foley noted the challenges firms like M&GPrudential face in trying to get younger people to save for retirement.

Axa chief executive Thomas Burbell last week highlighted the potential for the likes of Facebook and Amazon to disrupt the market for some financial products.

However, Mr Foley appears confident young people will rely on established players when considering things like how to save for retirement.

Prudential group bosses may see better prospects overseas but Mr Foley believes the UK market offers attractive growth prospects, although the uncertainty around Brexit is unhelpful.

“There is an estimated savings gap of about eight trillion dollars in the UK … the amount of money that people need to collect in order to have a decent standard of living in retirement,” said Mr Foley.

He noted M&GPrudential has attracted £3.5 billion inflows of funds in respect of its PruFund product this year, while many asset managers have suffered outflows. PruFund aims to smooth out the impact of stock market volatility.

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The demerged business will include the M&G asset management operation, which is based in London.

Mr Foley noted the possibility the firm could hire people in Scotland as it looks to widen the range of markets it serves.

He met investors in Edinburgh yesterday ahead of a shareholder vote scheduled for October 15 on the demerger from Prudential group.

The UK business will be called M&G following the demerger and use the Prudential name under licence.

Shareholders in Prudential will get one share in M&G for every one they hold in the group.

Prudential bought Stirling-based former mutual Scottish Amicable for £2.75billion in 1997. ScotAm employed around 2,000 people when the deal was struck.

M&GPrudential employs around 4,500 in the UK.