SIPPs - UK - December 2015
Overview
 
What you need to know 
Self-invested personal pensions (SIPPs) have been in existence for a quarter of century. Originally a specialist pension designed for wealthier, entrepreneurial investors, the product has evolved in response to technological innovation and regulatory intervention. The rise of platforms and streamlined products – driven partly by regulatory changes to the advice market – has helped to catapult SIPPs from a niche offering into the mainstream. Today, there are upwards of 1.4 million plans in force. Moreover, the market is set to get a further boost from the new pension freedom rules introduced in April 2015. 

While there are good prospects for future market growth, there are also a number of challenges facing SIPP operators, not least higher capital adequacy requirements. How well firms manage to cope with the expected rise in demand, coupled with the need to hold greater levels of capital, will ultimately determine their future success, even survival. 

Mintel’s report examines how these external pressures and new opportunities are altering the SIPP landscape, making it ripe for further consolidation, as well as expansion. It provides an overview of the market’s size and expected growth over the next five years, and identifies the leading SIPP operators. In addition, it reviews the results of Mintel’s consumer survey, which gives insight into the attitudes, behaviours and decumulation plans of SIPP investors.

Products covered in this report
For the purposes of this report, Mintel uses the following definitions: 

A self-invested personal pension (SIPP) is a type of defined-contribution personal pension that gives the investor greater flexibility and control over investment choice. Since its inception in 1989, the product has evolved to the point where there are now broadly two main product types, catering for different markets. These are:

●	Streamlined SIPP is an investment product comprising a wide range of standard investments, such as equities, cash, collective investments and bonds, but which typically require the investor to use the ‘in-house’ share trading service or platform. They include lower-cost, simplified SIPPs (which typically have a low or no minimum investment) and mid-range collective SIPPs. 
●	Full-range SIPP is a SIPP in its purest (‘open architecture’) form, allowing every investment permitted by HMRC rules – including commercial property and more esoteric investment types such as derivatives and venture capital trusts – to be bought and held via a full range of investment counterparties. Full-range SIPPs tend to have higher administration charges and usually require a minimum investment of £50K. Consequently, they are often taken out by the mass affluent, affluent and the high net worth (HNW), through the advised channel.

SIPPs may also be categorised according to how they are legally structured, ie whether they are insured products (provided by insurance companies and established by deed poll) or non-insured products (written under trust). Around three fifths of all SIPPs in force are estimated to be non-insured.