Table of Contents
Issues in the Market
-
- Key issues
- Market background and definitions
-
- Figure 1: Types of private pension provision in the UK
- Definitions
- Occupational schemes
- Individual pensions
- Group pensions
- GPPs vs group stakeholder and group SIPPs
- GPPs provide significant benefits for employers
- Workplace pensions structure
-
- Figure 2: Types of workplace pension, 2010
- Scheme administration
- Benefit structures
- The role of the Pensions Regulator
- The Pensions Regulator and trustees
- Reforming the UK pension system
- Tax reform
- Other definitions
Future Opportunities
-
- Boom comes to an end
- Generation Name Game
Market in Brief
-
- Scheme size and membership
- Pension fund values and contributions
- Fall in new insurance-administered business volumes in 2009
- Major changes taking place in employee benefits market
- A new pensions landscape…
- …and a new operating environment
- Pension fund deficits remain high
- IFAs losing market share
- Standard Life tops insurance-administered pension fund table
- Brand communication and promotion
- Key consumer research findings
- Pension product ownership
- Attitudes towards pensions in general
- Attitudes towards workplace pensions
- Attitudes towards retirement age
Internal Market Environment
-
- Key points
- Security ranks above pension contributions
-
- Figure 3: Factors considered important to employees, 2009 and 2010
-
- Figure 4: Proportion of employers offering pension benefits as core benefits, March 2010
- Big drop in occupational pension provision
- Shift to DC pension scheme continues
- Towards 2012 and beyond
- What schemes will employers choose?
- A change of direction in pension policy?
- RDR edging towards implementation date
- Pension scheme deficits remain high
- Pension Protection Fund under pressure to reduce its deficit
- Longevity risk becoming a key part of pension risk transfer market
- Emergence of corporate/group SIPPs
Broader Market Environment
-
- Key points
- Rise of four million over-65s in next 15 years
-
- Figure 5: Cohort life expectancy at age 60, by gender, 1981-2058
- Retirees may have to live on half or less of average wage
-
- Figure 6: Average gross weekly income of pensioner units*, by age, 2007/08
- Boost to the state pension
- Rising longevity poses big policy challenges
-
- Figure 7: Projected size of the UK population, by age band, 2010-58
- More people will work longer
-
- Figure 8: UK economic activity among people of pension age, by gender, 2002-08
- Unemployment hits pension contributions
-
- Figure 9: Working age unemployment rate, 2004-09
- Fewer people intending to make regular pension contributions in recent years
-
- Figure 10: Pension contribution intentions, 2002-10*
-
- Figure 11: Pension contribution intentions, by household income, socio-economic group and working status, 2006-10
- Stockmarket volatility hits pension plans
-
- Figure 12: FTSE 100 and FTSE All Share indices, quarterly March 2000-March 2010
Competitive Context
-
- Key points
- Strong demand for ISAs
-
- Figure 13: ISA sales, by type, 2003/04-2008/09
- Buy-to-let market in state of flux
-
- Figure 14: New buy-to-let mortgage business, 2003-09
- Pensions failing to attract the wealthy
Strengths and Weaknesses in the Market
-
-
- Figure 15: Occupational/group pensions, SWOT analysis, 2010
-
Who’s Innovating?
-
- Key points
- Regulatory constraints restrict innovation – but set to change
- Innovation to generate greater retirement planning engagement
- Pensions get their own TV channel
- Supporting advisers
- Group SIPP and GPP developments
- Charging model could be transformed
Market Size
-
- Key point
- Number of occupational schemes down a fifth since 2004
-
- Figure 16: Number of private sector occupational pension schemes in the UK, by scheme size, 2004-08
- Status of occupational pension schemes
- Rise in pensions in payment and preserved pension entitlements
-
- Figure 17: Number of members of occupational pension schemes; by membership type and sector, 2006-08
- Long-term decline in active members of occupational pension schemes
-
- Figure 18: Number of active members of occupational pension schemes; by sector, 1991-2008
- Much higher contribution rates in private sector DB rather than DC schemes
- Fewer schemes contracting out
-
- Figure 19: Number of active members of private sector occupational schemes, by contracting out, 2007 and 2008
- Value of funded pensions down 13% in 2008
-
- Figure 20: Value of assets in funded pensions in real terms, 1998-2008
- Segment Performance
- Insurance-administered section
-
- Figure 21: New insurance-administered occupational pension business, 2003-10*
- In-force business increases despite falling membership
-
- Figure 22: Insurance-administered occupational pension business in force, 2003-08
- Big gain in Trustee Investment Plans
-
- Figure 23: New insurance-administered occupational pension business, by sub-sector, 2008 and 2009
- Insurance-administered pension sector should benefit from the recovery
-
- Figure 24: Forecast of new Insurance-administered occupational pension business, APE premiums*, 2005-15
- Factors used in the forecast
- Group personal pensions – Market size
-
- Figure 25: New group personal pension business, 2003-09
- Little change in GPPs in force
-
- Figure 26: Group personal pension business in force, 2003-08
Market Share
-
- Key points
- Little change in leading providers
-
- Figure 27: Top 20 insurance companies in the occupational pension market, based on gross written premiums, 2007 and 2008
- Legal & General dominates in amount of funds held in insurer-administered pensions
Market Structure, Companies and Products
-
-
- Figure 28: The main participants in the occupational pension market
- Employers
- Insurers
- Major players
- Standard Life Plc
- Prudential plc
- AEGON
- Legal & General Group
- Canada Life
-
Channels to Market
-
- Key points
- Most company pension businesses sold with advice
- Falling presence of IFAs in new occupational pensions regular premium
-
- Figure 29: Distribution breakdown of new insurance-administered occupational pension business – regular premium, 2004-09
- Slump in new business through IFA channel in single-premium occupational pensions
-
- Figure 30: Distribution breakdown of new insurance-administered occupational pension business – single premium, 2004-09
- IFAs dominate in GPP business
-
- Figure 31: Distribution breakdown of new insurance-administered GPP business – regular and single premium, 2004-09
Brand Communication and Promotion
-
- Key points
- Direct advertising of company pensions to consumers is rare
-
- Figure 32: Pensions adspend, 2007/08-2009/10
- Big jump in spending by major providers
-
- Figure 33: Leading pension advertisers, 2007/08-2009/10
- Press dominates medium used for advertising
-
- Figure 34: Pension adspend, by media type, 2007/08-2009/10
Ownership of Savings and Investment Products
-
- Key points
- Nearly a third of consumers have an occupational/employer-based pension scheme
-
- Figure 35: Ownership of saving and investment products, March 2010
- The legacy of final-salary schemes
-
- Figure 31: Pension scheme membership, by working status, March 2010*
- A generational and regional gap
Attitudes towards Pensions and Retirement Savings
-
- Key points
- Big rise in non-retired who believe pensions are the best way to save for retirement
-
- Figure 36: Statements on pensions and retirement savings, 2009 and 2010
-
- Figure 37: Agreement with ‘Pensions are the best way to save for retirement’, by gender, age and household income, 2009 and 2010
- Middle classes most worried about pension scheme security
- Property still viewed as an alternative long-term savings vehicle
- Only a minority of the non-retired regularly attend to pension matters
- Differences in attitude between final-salary and defined-contribution pension scheme members
-
- Figure 38: Statements on pensions and retirement savings, by most popular ownership of saving and investment products, March 2010
- Figure 39: Statements on pensions and retirement savings, by next most popular ownership of saving and investment products, March 2010
Attitudes towards Occupational or Company Pension Schemes
-
- Key points
- A good pension scheme not key for job seekers
-
- Figure 40: Attitudes towards occupational or company pension schemes, March 2010
- A minority aren’t interested even when a pension is on offer
- More DB members value employer contributing to pension than DC members
-
- Figure 41: Attitudes towards occupational or company pension schemes, by most popular ownership of saving and investment products, March 2010
- Figure 42: Attitudes towards occupational or company pension schemes, by next most popular ownership of saving and investment products, March 2010
Retirement Planning and Expectations
-
- Key points
- Over half of the non-retired expect to retire at or before the current state pension age
-
- Figure 43: Planned age of retirement, March 2010
- People retiring gradually best placed financially
-
- Figure 44: Ownership of saving and investment products, by most popular planned age of retirement, March 2010
- Figure 45: Ownership of saving and investment products, by next most popular planned age of retirement, March 2010
- Early-intending retirees found among younger high earners
- Older, single, modest earners most likely to retire later than state pension age
- More people expect to retire at state pension age
- Around a quarter of the non-retired are Pension-poor
- Pension security a big worry for early retirees and gradual retirees
-
- Figure 46: Statements on pensions and retirement savings, by most popular planned age of retirement, March 2010
- Figure 47: Attitudes towards occupational or company pension schemes, by planned age of retirement, March 2010
Appendix – Ownership of Savings and Investment Products
-
-
- Figure 48: Most popular ownership of saving and investment products, by demographics, March 2010
- Figure 49: Next most popular ownership of saving and investment products, by demographics, March 2010
-
- Figure 50: Other ownership of saving and investment products, by demographics, March 2010
- Figure 51: Repertoire of ownership of saving and investment products, by demographics, March 2010
-
Appendix – Attitudes towards Pensions and Retirement Savings
-
-
- Figure 52: Most popular statements on pensions and retirement savings, by demographics, March 2010
- Figure 53: Next most popular statements on pensions and retirement savings, by demographics, March 2010
-
Appendix – Attitudes towards Occupational or Company Pension Schemes
-
-
- Figure 54: Attitude towards occupational or company pension schemes, by demographics, March 2010
-
Appendix – Further Analysis
-
-
- Figure 55: Target groups, by demographics, March 2010
-
Back to top