What you need to know
The SIPPs market enjoyed a bumper year in 2016/17. According to Rock Consultancy, the number of SIPPs in force rose to 1.97 million, while the value of assets under administration grew 42% to £260 billion in August 2017. This growth has come despite increased compliance costs resulting from the introduction of new capital adequacy rules.
SIPPs have benefited from pensions freedoms, as consumers have looked to put their retirement savings in products that offer greater flexibility. A third of SIPP investors say they have transferred funds from another pension scheme into their SIPP in the last year, a driving force that can be expected to continue. Despite the uncertainty of Brexit, which has the potential to dampen economic growth, SIPP investors remain confident for the year ahead, pointing to further growth for providers.
This Report includes analysis of the size of the SIPPs market, as well as a forecast for the next five years. There is discussion of the major drivers of the market, and the size and strategies of major players. Mintel’s exclusive consumer research provides insight into the types of assets and investments included in SIPPs, the reasons for choosing them and factors considered when choosing a provider. We look at recent and planned investment, transfer and switching activity, contributions levels and, finally, the use and preference of different channels to access SIPPs.
Products covered in this report
For the purposes of this Report, Mintel has used 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 creation 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/platform SIPPs offer investors access to a range of standard investments, such as equities, cash, collective investments and bonds, but usually 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, which tend to be offered by insurance companies.
Full-range/bespoke SIPPs are a SIPP in its purest form, allowing the widest choice of investments – including commercial property and more esoteric investment types such as derivatives – 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 £50,000. Consequently, they are often taken out by the mass affluent, affluent and the high net worth (HNW), through the advised channel. They also tend to be run off platform, so may be referred to as non-platform based SIPPs.
SIPPs may also be categorised according to how they are legally structured. The two key structures are insured products (provided by insurance companies and established by deed poll) and non-insured products (written under trust).
