In 2013, workplace pension membership grew for the first time since 2006, a success which was repeated in 2014. The workplace pension market has now seen over 5 million employees join workplace pension schemes since the start of auto-enrolment. However, 2014 also brought the announcement of a new challenge for pension providers through pension freedoms.

The freedoms have opened up an advice gap that could prevent retirees from accessing the support they need to make the most suitable decisions. Pension and annuity providers will be looking closely at how their investment products match the market and are likely to consider part-drawdown, part-annuity hybrids to increase uptake.

Auto-enrolment remains far from yesterday’s concern. Thousands of small and micro employers are set to come under its remit in the next few years, bringing droves of savers with them. There are testing times ahead, as employers and providers must adapt to high volume enrolment whilst ensuring workers are supported to save responsibly for their future.

Mintel’s report examines the workplace pension savings market from active contribution to decumulation across group and occupational workplace schemes. Mintel’s market analysis is complemented by the results of an independently commissioned consumer survey, which assesses pension ownership and participation levels among the UK workforce, along with member awareness and engagement, and general attitudes toward retirement saving.

There are various types of workplace pension, which can be broadly segmented into two main groups: occupational trust-based schemes and group contract-based pensions.

An occupational (or company) pension is a scheme organised by an employer, or on behalf of a group of employers, to provide pensions and/or other benefits for one or more employees on leaving service, on death or retirement. In the private sector, occupational schemes are trust-based.

Occupational pensions come in two main forms: defined benefit (DB) or salary-related (eg final salary, career average salary) and defined contribution (DC) or money-purchase schemes.

Trust-based schemes are run and managed through a board of trustees. These trustees are legally obligated to act in the interests of the scheme’s members. Employers can choose to administer these schemes themselves (self-administered) or outsource the administration to an insurance company (insurer-administered).

A master trust is a multi-employer, trust-based scheme that differs only from a normal trust-based DC scheme in that it is open to the employees of many employers, the staff of which are all treated equally and follow the same rules.

NEST (National Employment Savings Trust) is a master trust DC pension scheme set up by the Government mainly to help employers meet new workplace pension duties. Between 2012 and 2018, employers must automatically enrol eligible workers in a workplace pension scheme and pay contributions.

Group personal pensions (GPPs) are administered by employers, but run by insurance companies (ie they are contract-based as opposed to trust-based) and managed on a group basis. They are essentially a series of defined contribution individual personal pensions. As with other types of DC scheme, members in a GPP build up a personal fund, which they then convert into an income at retirement.

Group stakeholder pensions (GSPs), also known as employer-sponsored stakeholder pensions, are similar to GPPs in that they are group schemes with the same rules for eligibility, transfers, benefits, contributions and taxation. However, a GSP provider must get approval from HMRC, and register the scheme with the Occupational Pensions Regulatory Authority (OPRA). GSPs will also be subject to a number of Department for Work and Pensions (DWP) regulations that do not apply to group personal pensions.