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Overall new business in the UK, including wholesale operations, increased by 18 per cent, and new business profit grew 19 per cent to reach £129m. The internal rate of return on new business was 15 per cent.

In its half-yearly report, Prudential said much of the growth was due to with-profits bond sales tripling, to account for 46 per cent of overall retail sales in the period. The company added that sales of cautiously managed with-profits products supported sales across the annuity and pensions product range.

The company added that is had also made "good progress" against its cost reduction goals in the UK, achieving £115m of the targeted annual total cost savings of £195m.

In a statement, Prudential added: "Work is proceeding in line with plan and we are on track to deliver the targeted reduction in our cost base by 2010."

This follows the decision to outsource many of the back office processes for its mature books of business to Capita and the decision to not proceed with a reattribution of the Inherited Estate held in the with-profits sub-fund of The Prudential Assurance Company.

Group wide, Prudential saw group new business sales rise 12 per cent to £1.5bn, lifting new business profit up 11 per cent to reach £602m.

Mark Tucker, group chief executive said: "Our retirement-led strategy continues to drive the group's growth, with a clear focus on profitable revenue streams across the diverse geographic spread of our businesses."

He added: "As a result of our targeted approach to the market, our UK operations achieved an 11 per cent increase in retail new business APE. Overall new business including wholesale operations increased by 18 per cent and new business profit was £129 million, up 19 per cent.

"These figures demonstrate that the disciplined delivery of our UK strategy is producing the anticipated positive financial results, with strong growth across both our retail and wholesale operations."