56 Business overview  Results of operations – United Kingdom Results 2012 United Kingdom Net income Underlying earnings before tax Commissions and expenses Production Net income improved to GBP 140 million driven by higher  underlying earnings before tax, higher realized gains on  investments, and the absence of impairment charges and  restructuring charges. Results on fair value items amounted to  a loss of GBP 26 million, driven by losses on hedges as a result of  higher equity markets. Realized gains on investments amounted  to GBP 68 million and were mainly the result of switching from  gilts into high quality credits. There were no impairments during  the year. A reduction in the corporate tax rate in the United  Kingdom had a positive impact on net income. Underlying earnings before tax from Aegon’s operations in the  United Kingdom increased to GBP 89 million in 2012, driven by  a strong improvement in underlying earnings before tax from  pensions compared to 2011. Underlying earnings before tax  included recurring charges for Corporate Center expenses of  GBP 8 million. Commissions and expenses declined by 18% in 2012 compared  to 2011 mainly due to lower operating expenses. Operating  expenses declined 33% to GBP 269 million, following the  implementation of a cost reduction program in the United  Kingdom, the non recurrence of restructuring charges in 2011,  partly offset by the benefit from changes to employee pension  plans in 2011. This reduction has been achieved while continuing  to invest in new propositions in the pension business. Operating  expenses included GBP 8 million of recurring charges for  Corporate Center expenses. New life sales increased to GBP 758 million, reflecting growth  in both the life and group pension businesses. Platform sales  accelerated throughout the year as new advisors joined the  Aegon Retirement Choices platform. cost reduction program. These positives were partly offset by  the effect from adverse persistency, which the UK insurance  industry is experiencing as a result of the implementation of  the Retail Distribution Review, the sale of Guardian in  2011 and by a benefit as a result of changes to the employee  pension plan in 2011.  Underlying earnings before tax from Aegon’s operations in the United Kingdom  improved to GBP 89 million driven by lower expenses following the implementation  of the cost reduction program in 2011 and the absence of charges and expenses  related to the customer redress program in 2011. Aegon introduced a new  platform to the market in 2012. ■ Underlying earnings before tax from Life declined to GBP  66 million driven mostly by the non-recurrence of a GBP  15 million benefit and recurring charges for Corporate Center  expenses.  ■ Underlying earnings before tax from Pensions improved to  GBP 25 million, mainly driven by the non-recurrence of  charges and execution expenses related to a program to  correct historical issues within customer policy records  recorded in the previous year and the implementation of the  ■ Distribution amounted to an underlying loss before tax of  GBP 2 million, improving over last year mainly due to cost  savings.  Annual Report 2013