Table of Contents
Executive Summary
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- The market
- SIPP market is expected to continue on its upward path
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- Figure 1: Forecast of volume of new SIPP sales (at current prices) – fan chart, 2009-19
- Figure 2: Forecast of value of new SIPP premiums (at current prices) – fan chart, 2009-19
- SIPP assets under management are approaching £50 billion
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- Figure 3: Total wealth management industry SIPP assets, 2008-13
- Market factors
- Confidence is rising among the higher earners and SIPP investors
- Key regulatory developments
- Nearly three in five investors arranged their SIPP through an adviser
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- Figure 4: SIPP purchasing methods, July 2014
- Companies, brands and innovation
- Standard Life holds leading position in SIPP market share in 2014
- Consolidation in the SIPP market expected to continue
- Consolidation and regulation stifles innovation in SIPP market
- SIPP providers supporting advisers
- Suffolk Life makes switching SIPPs easier
- James Hay succeeds with a modular approach
- The consumer
- SIPP ownership
- SIPP investment ownership
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- Figure 5: SIPP Investment ownership, July 2014
- Many investors stick to core investment products
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- Figure 6: Number of SIPP investment products owned by SIPP holders, July 2014
- General attitudes and behaviour of SIPP investors
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- Figure 7: Investor behavioural habits, July 2014
- Investor satisfaction with SIPP investment range
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- Figure 8: Investor satisfaction with SIPP investment range, July 2014
- Investor attitudes towards SIPP transfers
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- Figure 9: Investor attitudes towards SIPP transfers, by ‘Yes’ answers, July 2004
- SIPP investors have a strong preference for drawdown over annuities
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- Figure 10: Investor plans at retirement, July 2014
- Investor plans to seek advice at retirement
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- Figure 11: Investor intentions to seek financial advice at retirement, July 2014
- What we think
Issues and Insights
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- The modular approach could be the key to success
- The facts
- The implications
- Reactions to pension reforms push income drawdown to the top
- The facts
- The implications
Trend Application
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- Return to the Experts
- Make It Mine
- Mintel Futures: Brand Intervention
Market Drivers and Regulatory Environment
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- Key points
- Confidence is rising among the higher earners…
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- Figure 12: How respondents would describe their financial situation, by gross annual household income, September 2014
- Figure 13: Current financial situation compared to a year ago, by gross annual household income, September 2014
- …and among SIPP investors
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- Figure 14: Pension investment plans, by SIPP and other pension ownership, July 2014
- Bank rate cuts hit SIPP firms’ interest income
- FCA publishes its final capital adequacy requirements…
- …ready to stir up the SIPP landscape…
- …and accelerate consolidation of SIPP providers
- FCA’s thematic review into SIPP providers finds ‘widespread’ failings
- Market developments in the wider pension industry
- 2014 Budget: a positive development for the SIPPs market
- Government to abolish the 55% inheritance tax on pensions funds
- SIPP complaints to the FOS soar
- Auto-enrolment continues to boost pension participation in the UK
Who’s Innovating?
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- Key points
- Consolidation and regulation stifles innovation in SIPP market
- SIPP providers supporting advisers
- Fidelity’s Retirement Service
- Rowanmoor Group’s series of ‘New Insights’ adviser workshops
- AJ Bell’s Infocentre
- Numerous SIPP providers cut their pension charges
- Suffolk Life makes switching SIPPs easier
- Will James Hay pave the way for a modular approach?
Market Size and Forecast
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- Key points
- SIPP sales nearly doubled in volume in 2013
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- Figure 15: Volume and value of new SIPP business, 2009-13
- SIPP assets under management are approaching £50 billion
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- Figure 16: Total wealth management industry SIPP assets, 2008-13
- Growth in new SIPP business is expected to continue over the next five years
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- Figure 17: Forecast of volume of new SIPP sales (at current prices) – fan chart, 2009-19
- Figure 18: Forecast of value of new SIPP premiums (at current prices) – fan chart, 2009-19
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- Figure 19: Forecast of volume and value of new SIPP business, at current and constant prices, 2014-19
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Standard Life holds leading position in SIPP market share in 2014
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- Figure 20: Top 10 SIPP providers, by value of in-force business, as at 1 August 2014
- Consolidation in the SIPP market expected to continue
Companies and Products
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- AJ Bell
- Company description
- SIPP product range
- Distribution mix
- Recent financial performance
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- Figure 21: Interim financial data for AJ Bell, H1 2013 and H1 2014
- Recent activity
- Hargreaves Lansdown
- Company description
- SIPP product range
- Distribution mix
- Recent financial performance
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- Figure 22: Annual financial data for Hargreaves Lansdown, 2013-14
- James Hay Partnership
- Company description
- SIPP product range
- Distribution mix
- Recent financial performance
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- Figure 23: Annual financial data for IFG Group PLC and James Hay Partnership, 2012-13
- Figure 24: Half year financial data for IFG Group PLC and James Hay Partnership, 2013-14
- Recent activity
- Standard Life
- Company description
- SIPP product range
- Distribution mix
- Recent financial performance
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- Figure 25: Half year financial data for Standard Life, 2013-14
- Recent activity
- Suffolk Life
- Company description
- SIPP product range
- Distribution mix
- Recent financial performance
- Recent activity
Brand Communication and Promotion
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- Key points
- Decline in overall adspend on pension products
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- Figure 26: Total advertising expenditure on pensions and retirement income solutions, by sub-category, 2010/11-2013/14
- Hargreaves Lansdown holds its position as top SIPP advertiser
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- Figure 27: Top 10 advertisers of SIPPs, 2011/12-2013/14 (year ending 31 August)
- Direct mail accounts for the largest share of adspend on SIPPs
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- Figure 28: Proportional distribution of adspend on SIPPs of the top 10 advertisers, by media type, 2013/14 (year ending 31 August 2014)
- A note on adspend
Channels to Market
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- Key points
- Nearly three in five investors arranged their SIPP through an adviser
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- Figure 29: SIPP purchasing methods, August 2013 and July 2014
- Direct channels still remain popular
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- Figure 30: SIPP purchasing methods, by age, July 2014
- More than half of SIPP investors favour a self-directed management approach
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- Figure 31: Approach to investment management and decision-making, by SIPP and other pension ownership, July 2014
SIPP and Pension Ownership in Context
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- Key points
- SIPP ownership is low amongst the general population…
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- Figure 32: Active pension ownership, by scheme type, December 2013
- …while workplace pension ownership has increased significantly as a result of auto-enrolment
- SIPPs are the most attractive among higher earners
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- Figure 33: Active pension ownership, by highest rate of income tax paid, December 2013
SIPP Investment Ownership
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- Key points
- Survey background
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- Figure 34: SIPP and pension ownership among the more affluent segments, July 2014
- Mainstream investment vehicles are most popular amongst SIPP investors
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- Figure 35: SIPP investment ownership, July 2014
- Many investors shy away from highly diversified portfolios
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- Figure 36: Number of SIPP investment products owned by SIPP holders, July 2014
- Figure 37: SIPP investment ownership, by number of investment products, July 2014
- More streamlined products may be the solution
- Financial advice facilitates more complex investments
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- Figure 38: SIPP investment ownership, by SIPP purchasing method, July 2014
General Attitudes and Behaviour of SIPP Investors
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- Key points
- Nearly two fifths of SIPP investors make regular contributions
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- Figure 39: Investor behavioural habits, July 2014
- Direct SIPP holders are more likely to mainly use lump-sum contributions
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- Figure 40: Investor contribution habits, by SIPP purchasing method, July 2014
- Over one third of investors keep a regular check on their SIPP’s performance
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- Figure 41: Investor frequency of monitoring SIPP performance, by SIPP purchasing method, July 2014
- Men and over-55s tend to be more engaged with their SIPP
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- Figure 42: Investor frequency of monitoring SIPP performance, by gender and age, July 2014
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- Figure 43: Investor frequency of seeking professional advice, by gender and age, July 2014
- Demand for ad hoc advice
Investor Satisfaction with SIPP Investment Range
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- Key points
- More than one in five are dissatisfied with the range of investments offered by their SIPP
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- Figure 44: Investor satisfaction with SIPP investment range, July 2014
- More affluent respondents are more likely to be satisfied with the choice offered
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- Figure 45: Investor satisfaction with SIPP investment range, by gender and value of investable assets, July 2014
Investor Attitudes towards SIPP Transfers
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- Key points
- Transfers into SIPPs are fairly common…
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- Figure 46: Investor attitudes towards SIPP transfers, July 2014
- …while transfers out of SIPPs are less frequent
- Over one in five have previously switched SIPP provider
Investment Plans at Retirement
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- Key points
- Income drawdown is the most commonly chosen approach at retirement
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- Figure 47: Investor plans at retirement, July 2014
- Just over one in 10 SIPP investors plan to take their entire pension fund as cash
- Nearly three in 10 are unsure of what they will do at retirement
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- Figure 48: Investor plans at retirement, by age, July 2014
- Wealthier SIPP investors are more confident of their retirement plans
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- Figure 49: Investor plans at retirement, by value of investable assets, July 2014
- Little significant difference between advised and non-advised investors
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- Figure 50: Investor plans at retirement, by SIPP purchasing method, July 2014
Investor Plans to Seek Advice at Retirement
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- Key points
- Majority of SIPP investors plan to seek professional advice at retirement
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- Figure 51: Investor intentions to seek financial advice at retirement, July 2014
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- Figure 52: Investor intentions to seek financial advice at retirement, by SIPP purchasing method, July 2014
- Nearly three quarters of unsure investors plan to seek advice
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- Figure 53: Investor intentions to seek financial advice at retirement, by plans at retirement, July 2014
Appendix – Market Forecast
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- Figure 54: Forecast of volume of new SIPP sales – best- and worst-case scenario, 2014-19
- Figure 55: Forecast of value of new SIPP premiums – best- and worst-case scenario, 2014-19
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