Table of Contents
Introduction and Abbreviations
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- Context
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- Figure 1: Pensions timeline
- Scope of the report
- Definitions
- Global information and research
- Consumer research
- Abbreviations
Premier Insight
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- Market dynamics within the Pensions sector
Executive Summary
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- Background considerations
- Industry issues
- Market size
- The consumer
- Future developments
Background
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- History of occupational pensions
- Types of occupational scheme
- Funding
- Scheme management
- Growth and contraction of occupational schemes
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- Figure 2: Employees in occupational pension schemes, by gender, 1936-2000
- Pension contributions grew rapidly in the period 1996-2001
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- Figure 3: Values of and contributions to occupational schemes, 1991-2001
- Changes affecting occupational pensions and scheme membership
International Context
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- Worldwide variations
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- Figure 4: Pension coverage across industrialised nations, 2004
- European Union
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- Figure 5: Overview comparison of European pension arrangements
- United States
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- Figure 6: The swing to direct contribution in US pensions, 1980 and 1998
Market Factors
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- Demographic factors
- Longer life-expectancy
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- Figure 7: Expectation of life at age 50 in the UK, by gender, 1971-2040
- Other demographic factors
- Investment conditions
- Economic climate
- Investment conditions
- Mergers and acquisitions
- Employer activity
- Employer initiatives
- Cost control
- Large firm/small firm divide
- Availability of occupational schemes
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- Figure 8: Availability of defined benefit occupational pension schemes, 2000
- Flexible benefits
- Level of scheme reviews
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- Figure 9: Level of scheme reviews expected in 2004
- Contribution increases are likely reason for change
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- Figure 10: Companies changing pension arrangements in 2004
- Modelling the switch from DB to DC
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- Figure 11: Live schemes, March 2004
- Small schemes account for very few employees
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- Figure 12: Distribution of members across schemes, by size, March 2004
- Figure 13: Live pension schemes excluding very small schemes, by type, 1999-2004
- Decline in number of schemes is clear
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- Figure 14: Trends in larger DB and DC schemes, 2000-04
- How low will the number of schemes fall to?
- The contribution gap
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- Figure 15: Differences between DB and DC scheme contributions, 2003 and 2004
- Emergence of multi-employer schemes
- Employee attitudes
- Contribution rates and the contribution gap
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- Figure 16: Consumers who agreed with the statement ‘I do not understand complex financial products’, March 2004
- Consumer education
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- Figure 17: Methods used by employers to communicate pension information, 2004
- Regulatory initiatives
- Government reforms
- Tax reforms
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- Figure 18: Scale of tax relief applied to occupational pension schemes, 1998/99-2002/03
- Regulation
- European regulation
Market Size and Development
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- Market model
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- Figure 19: Market reference model for occupational pensions
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- Figure 20: Market size reference model
- Market metrics
- Contributions
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- Figure 21: Pension fund contributions, 1997-2002
- DC scheme contributions grow within the insured sector
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- Figure 22: The pensions business of insurance companies, 1997-2002
- Scheme membership
- General coverage
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- Figure 23: Live occupational pension schemes in the UK (DB and DC), 2000-03
- Figure 24: Individual members in occupational pension schemes, 2002 and 2003
- Pension ownership by demographic sub-group
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- Figure 25: Occupational pension coverage, by size of establishment, 2002
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- Figure 26: Pension coverage of employees, by age group, 2001/02
- Figure 27: Pension cover of employees, by age group, 2002
- Industry coverage
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- Figure 28: Pension scheme membership, by gender and industries, 2002
- Trends in scheme coverage
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- Figure 29: Trends in occupational scheme coverage, 1989-2002
- Assets under management
- Composition of funds
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- Figure 30: Typical pension fund composition, by asset class, 2002
- Assets under management – a point of some debate
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- Figure 31: Occupational pension fund assets under management in 2001
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- Figure 32: Market value of UK occupational pension schemes, 1995-2002
- Effect on scheme performance
The Supply Structure
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- Figure 33: Partial reference model for industry supply structure
- Investment managers
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- Figure 34: Major UK pension fund managers, 2003
- Scheme administrators
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- Figure 35: Top ten external pensions administrators, 2004
- Distributors
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- Figure 36: The major employee benefits consultants, 2004
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- Figure 37: Top ten pensions IFAs, 2003
- Other professional services
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Consumer Financial Activity
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- Consumers are confident about financial activity going forward
- Borrowing, saving and debt repayment activity
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- Figure 38: Savings, investment, borrowing and debt repayment – consumers’ expected activity, September 2002-March 2004
- ABs, 23-29s and those earning over £35,000 are likely to be the most financially active
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- Figure 39: Expected financial activity, by socio-demographic and income groups, March 2004 and average for the last eight quarters
- Consumers looking to service debt
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- Figure 40: Leading financial activities planned in the next six months, September 2002-March 2004
The Consumer
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- Company scheme membership continues to decline
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- Figure 41: Ownership of pension products, by pension type, May 2004
- Company pension ownership peaks among those aged 35-54
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- Figure 42: Contribution to pensions, by type, gender, age and socio-economic group, May 2004
- Ownership by lifestage
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- Figure 43: Contribution to pensions, by type, marital status, lifestage and Mintel's Special Groups, May 2004
- Work-related characteristics of pension ownership
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- Figure 44: Contribution to pensions, by type, working status, gross annual household income and tenure, May 2004
- People living in London and Scotland are most likely to belong to a company scheme
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- Figure 45: Contribution to pensions, by type, TV region and ACORN categories, May 2004
- Heavy TV viewers less likely to have pension provision
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- Figure 46: Contribution to pensions, by type, newspaper readership, new technology users, commercial TV viewing and supermarket usage, May 2004
Consumer Attitudes and Targeting Opportunities
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- Type of membership
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- Figure 47: Membership of company pension schemes, by scheme type, May 2004
- ABs most likely to have access to a final salary scheme
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- Figure 48: Ownership of company pension schemes, by gender, age and socio-economic group, May 2004
- ABC1 third age Special Group most likely to be part of a final salary scheme
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- Figure 49: Ownership of company pension schemes, by marital status, lifestage and Mintel’s Special Groups, May 2004
- DB membership is skewed towards higher income groups
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- Figure 50: Ownership of company pension schemes, by working status, gross annual household income and tenure, May 2004
- High DB pension ownership in Scotland/North West
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- Figure 51: Ownership of company pension schemes, by TV region, May 2004
- Media and buying patterns
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- Figure 52: Ownership of company pension schemes, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, May 2004
- Consumers in favour of property as their pension
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- Figure 53: Attitudes towards retirement provision and occupational pensions, May 2004
- Attitudes and characteristics
- Retirement too far away
- Younger people take a relaxed attitude
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- Figure 54: Respondents who believe retirement is too distant to worry about, by gender, age and socio-economic group, May 2004
- Married workers disagree
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- Figure 55: Respondents who believe retirement is too distant to worry about, by working status, marital status, lifestage and Mintel's Special Groups, May 2004
- Media and buying patterns meet expectations
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- Figure 56: Respondents who believe retirement is too distant to worry about, by newspaper readership and supermarket usage, May 2004
- Look for an employer who offers a company pension
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- Figure 57: Respondents who seek an employer offering a company pension, by gender, age and socio-economic group, May 2004
- Attitudes towards property versus pensions
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- Figure 58: Comparison of attitudes towards company pensions and property as an alternative, by socio-economic group, May 2004
- Those in work agree
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- Figure 59: Respondents who seek an employer offering a company pension, by working status, lifestage and Mintel's Special Groups, May 2004
- North/South divide?
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- Figure 60: Respondents who seek an employer offering a company pension, by TV region, May 2004
- Many see little point in saving in a pension
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- Figure 61: Respondents who see no point in saving, by age group, May 2004
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- Figure 62: Lack of motivation for pension saving, by age group, May 2004
- The well-off see the point
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- Figure 63: Respondents who see no point in saving, by socio-economic group, lifestage and Mintel’s Special Groups, May 2004
- Nervous in London
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- Figure 64: Respondents who see no point in saving, by TV region, May 2004
- Many see property as a better way to save
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- Figure 65: Respondents who believe property is a better way to save for retirement, by gender, socio-economic group, Mintel’s Special Groups and supermarket usage, May 2004
- Further statistical analysis
- Pension is the ‘base’ retirement provision
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- Figure 66: Comparison of pension scheme membership and investment ownership, May 2004
- Older workers worry about it but Middle England doesn’t see the point
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- Figure 67: CHAID analysis on company pension scheme membership, May 2004
Industry Issues
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- Structure
- Operations
- Marketing
Future of Pension Provision
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- Fluidity leads to diversity
- A new world
- Getting the behaviour you encourage
- Sauce for the goose
- Where are they?
- Make the most of it
- Diversity demands responsibility
- Grow up, all of you
- Self-sufficiency and the ‘Nanny state’
Forecast
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- Contributions will continue to grow
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- Figure 68: Forecast of total contributions to funded occupational schemes, 2004-09
- Aggregate market value will decline
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- Figure 69: Forecast of the market value of UK occupational pension schemes, 2004-09
- Schemes will continue to drop
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- Figure 70: Forecast of number of live occupational pension schemes in the UK, 2004-09
- Factors incorporated
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