Table of Contents
Overview
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- What you need to know
- Scope of this Report
- Trust-based pensions
- Contract-based pensions
Executive Summary
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- The market
- New premiums fell by 15% in 2017…
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- Figure 1: Value of new insurer-administered trust-based and group-based pension business* 2013-17
- …and are expected to continue to decline
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- Figure 2: Forecast of the value of new insurer-administered trust-based and group-based pension contracts, 2013-23
- 1.2 million employers have met their auto-enrolment duties
- Minimum contribution rises begin
- Companies and brands
- Top five represent two thirds of the trust-based market
- Focus on engagement to improve satisfaction and increase contributions
- Fintech challengers focus on technology innovation
- The consumer
- Three quarters of employees are enrolled in a workplace pension
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- Figure 3: Workplace pension enrolment, April 2018
- 35% say they are in a DC scheme, but many are confused
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- Figure 4: Type of workplace pension enrolled in, April 2018
- 63% support increasing contributions
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- Figure 5: Attitudes towards workplace pensions, April 2018
- Most are satisfied with their workplace pension
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- Figure 6: Satisfaction with workplace pension, April 2018
- Two thirds know exactly what they are contributing
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- Figure 7: Engagement with workplace pensions, April 2018
- What we think
Issues and Insights
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- The need for better education
- The facts
- The implications
- Increased engagement is key to higher contributions
- The facts
- The implications
The Market – What You Need to Know
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- New premiums fell by 15% in 2017
- Workplace pension ownership continues to rise
- 1.2 million employers have met their auto-enrolment duties
- Minimum contribution rises begin
Market Size and Forecast
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- New contracts recover whilst premiums stall…
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- Figure 8: New insurer-administered trust-based and group-based pension business (volume and value) 2013-17
- …with further decline expected
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- Figure 9: Forecast of the value of new insurer-administered trust-based and group-based pension contracts, 2013-23
- Figure 10: Forecast of the value of new insurer-administered trust-based and group-based pension contracts, at current and constant prices, 2013-23
- Forecast methodology
Trends in Workplace Pension Ownership
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- Workplace pension ownership continues to climb
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- Figure 11: Proportion of employees with workplace pensions, 1997-2017
- Private sector growth confined to contributions below 2% or earnings
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- Figure 12: Percentage of salary personally contributed by employees with workplace pensions, by sector, 2016 and 2017
Market Drivers
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- Employer pensions are the most trusted way of saving for retirement…
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- Figure 13: Financial products that consumers consider the safest way to save for retirement, July 2010-June 2012, July 2012-June 2014, July 2014-June 2016 and July 2016-June 2017
- …but property is seen as the most lucrative option
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- Figure 14: Financial products for saving for retirement that consumers consider make the most money, July 2010-June 2012, July 2012-June 2014, July 2014-June 2016 and July 2016-June 2017
- House prices continued to rise in 2017, but the market has slowed
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- Figure 15: Average house prices in the UK, by country, January 2005-January 2018
- 97% of auto-enrolment schemes are defined contribution
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- Figure 16: Pension scheme types and number of auto-enrolled eligible jobholders declared by employers, as at 31 March 2017
- 1.2 million employers have met their auto-enrolment duties
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- Figure 17: Declarations of compliance, March 2018
Regulatory and Legislative Changes
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- Minimum contribution rises begin
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- Figure 18: Minimum employer and staff contributions to be paid to workplace pensions
- The State Pension has increased
- Automatic enrolment review 2017
- A lack of clarity over plans for the Pensions Dashboard
Companies and Brands – What You Need to Know
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- Top five represent two thirds of the trust-based market
- Aviva is the biggest provider of contract-based schemes
- Focus on engagement to improve satisfaction and increase contributions
- Fintech challengers focus on technology innovation
- Adspend declined significantly in the last year
Provider Rankings and Market Share
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- Top five represent two thirds of the trust-based market
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- Figure 19: Rankings of top 20 providers of insurance-administered trust-based occupational pension business, by gross premiums, 2016
- Aviva maintains its prime position
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- Figure 20: Rankings of top 20 providers of insurance-administered individual and group contract-based pension business, by gross premiums, 2016
Competitive Strategies
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- Regulation hampers innovation
- Focus on engagement to improve satisfaction and increase contributions
- Fintech challengers focus on technology innovation
- Consolidation in the market
Advertising and Marketing Activity
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- Adspend declined significantly in the last year
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- Figure 21: Total above-the-line, online display and direct mail advertising expenditure on pension products and advice, 2015/16-2017/18
- TV attracts over a third of total spend
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- Figure 22: Distribution of above-the-line, online display and direct mail advertising expenditure on pension products and advice, by media type, April 2017-March 2018
- GOV UK becomes highest spender
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- Figure 23: Top 15 above-the-line, online display and direct mail advertisers of pension products and advice, 2016/17-2017/18
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Private sector workers comprise 73% of the workforce
- Three quarters of employees are enrolled in a workplace pension
- 35% say they are in a DC scheme, but many are confused
- 63% support increasing contributions
- Most are satisfied with their workplace pension
- Two thirds know exactly what they are contributing
Size and Sector of Employer
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- Private sector workers comprise 73% of the workforce
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- Figure 24: Size and sector of employer worked for, April 2018
- Public sector workers are feeling the squeeze
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- Figure 25: Changes in financial situation, by type of employer, April 2018
Pension Enrolment
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- Three quarters of employees are enrolled in a workplace pension
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- Figure 26: Workplace pension enrolment, April 2018
- Public sector workers still more likely to be enrolled in a pension
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- Figure 27: Consumers enrolled in a workplace pension, by type of employer, April 2018
- Short-term concerns, long-term repercussions?
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- Figure 28: Consumers who have opted out of a workplace pension, by financial confidence, April 2018
Type of Workplace Pension
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- Growth in DC schemes masked by rising confusion
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- Figure 29: Type of workplace pension enrolled in, April 2017 vs April 2018
- More help is needed to educate certain groups
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- Figure 30: Type of workplace pension enrolled in, by gender and gross household income, April 2018
- Final-salary schemes in decline
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- Figure 31: Type of workplace pension enrolled in, by type of employer, April 2018
Attitudes towards Workplace Pensions
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- 63% support increasing contributions…
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- Figure 32: Attitudes towards workplace pensions, April 2018
- …but many could face tough choices in the coming years
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- Figure 33: Agreement with selected attitudes towards workplace pensions, by type of workplace pension held, April 2018
- More than half worry about a their standard of living in retirement
- It’s never too soon to prioritise pensions
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- Figure 34: Agreement with selected attitudes towards workplace pensions, by generation, April 2018
Satisfaction of Workplace Pension
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- Most are satisfied with their workplace pension…
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- Figure 35: Satisfaction with workplace pension, by age, April 2018
- …but DC scheme members aren’t as happy
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- Figure 36: Satisfaction with workplace pension, by type of workplace pension held, April 2018
Engagement with Workplace Pensions
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- Two thirds know exactly what they are contributing
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- Figure 37: Engagement with Workplace Pensions, April 2018
- 42% regularly check the value of their pensions…
- …but vulnerable savers are less engaged
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- Figure 38: Agreement with the statement “I regularly check the value of my pension”, by current financial situation, April 2018
- The case for advice needs to be made more convincingly
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 39: Best- and worst-case forecast of the value of new workplace pension contracts, 2018-23
- Forecast methodology
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