Chief executive Keith Satchell said the figures showed a "strong performance against the backdrop of considerable market volatility and fragile investor confidence".

The sales figures highlighted the company's shift away from individual pensions to group pensions.

New business in individual pensions dropped 14.9%, while group business climbed 22.6%.

Finance director Martin Jackson said that the turbulent conditions on the stock market continued to be a problem.

"There is little doubt that within the savings and investments areas, and perhaps even pensions, the volatile stock markets have affected investor confidence," he said.

"If we see that confidence return, we would be more confident ourselves as we push forward."

In July, Friends Provident said it was cutting the final bonuses on its with-profits polices by an average of 6%, blaming the falling stock market for the move.

Shares in Friends Provident closed up 7.5p at 133.5p on Tuesday.