Table of Contents
Executive Summary
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- The market
- New premium income falls for the second year in a row…
- …and is set to continue its decline
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- Figure 1: Forecast of new individual pension business – fan chart, 2014-24
- SIPP sales also fall for the second consecutive year
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- Figure 2: Number of regulated SIPP, personal pension and stakeholder pension sales, 2015-19
- Non-advised sales the best-performing channel…
- Average individual pension contributions fell in 2017/18
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- Figure 3: Personal and stakeholder pension annual contributions, 2013/14-2017/18
- …while the self-employed continue to remain unengaged
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- Figure 4: Number of self-employed personal and stakeholder pension members and total contributions, 2013/14-2017/18
- New wake-up packs enter the market
- Companies and brands
- Royal London retains top spot
- A fall in DB transfers hits the larger SIPP providers
- AJ Bell prioritises advised customers
- Penfold focuses on the self-employed
- The consumer
- Confusion around pension ownership
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- Figure 5: Type of pension owned, September 2019
- Almost half of workplace pension savers are not saving anywhere else
- Individual pension holders expect to turn to financial advice
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- Figure 6: Agreement with attitudes towards pensions and retirement planning, by pension ownership, September 2019
- Just 6% intend to open an individual pension
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- Figure 7: Agreement with attitudes towards pensions and future retirement plans, by pension ownership, September 2019
- Converting interest into ownership is a challenge
- Individual pension holders are more engaged
- Clarity and transparency are key factors
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- Figure 8: Important factors among owners of individual pensions, September 2019
- What we think
Issues and Insights
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- Innovation and flexibility needed to drive ownership among the self-employed
- The facts
- The Implications
- Providers cannot rely on wake-up packs to attract Gen-Xers
- The facts
- The implications
The Market – What You Need to Know
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- New single-premium income falls for the second year in a row…
- …driven by a decline in single-premium personal pensions
- SIPP sales also fall for the second consecutive year
- Non-advised sales the best-performing channel
- Average individual pension contributions fell in 2017/18…
- …while the self-employed continue to remain unengaged
- New wake-up packs enter the market
Market Size and Forecast
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- Slight fall in the number of in-force individual pensions in 2018
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- Figure 9: Individual pension business in force, by product type, 2018
- SIPPs account for 34% of the non-workplace pensions market
- New single-premium income set to fall for the second consecutive year
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- Figure 10: New individual pension business, 2015-19
- New individual pension business to continue to decline
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- Figure 11: Forecast of new individual pension business – fan chart, 2014-24
- Figure 12: Forecast of new individual pension business, 2014-24
- Forecast methodology
Market Segmentation
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- New single-premium pensions set to fall by 20%
- Stakeholder pensions continue their decline
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- Figure 13: Number of new individual personal pension, stakeholder pension and insured SIPP sales, 2015-19
- Figure 14: Value of new individual personal pension, stakeholder pension and insured SIPP sales, 2015-19
- SIPP sales decline for the second year running, but still dwarf other individual pensions market
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- Figure 15: Number of regulated SIPP, personal pension and stakeholder pension sales, 2015-19
- Regulatory scrutiny has hampered pension transfers
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- Figure 16: Transfers as a share of new individual pension business, by product type, 2015-18
Channels to Market
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- Non-advised sales increase across the board…
- …with SIPPs the main beneficiary
- Sharp decline in adviser sales for personal and stakeholder pensions
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- Figure 17: New individual personal pension business, by sales channel, 2015-18
- Figure 18: New individual stakeholder pension business, by sales channel, 2015-18
- Figure 19: New individual insured SIPP business, by sales channel, 2015-18
Market Drivers
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- Auto-enrolment drives increased workplace pension membership
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- Figure 20: Membership of occupational pension schemes, by membership type, UK, 2008-18
- Employers drive increased personal pension contributions
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- Figure 21: Personal and stakeholder pension annual contributions, 2013/14-2017/18
- Self-employed personal pension members and contributions fall
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- Figure 22: Number of self-employed personal and stakeholder pension members and total contributions, 2013/14-2017/18
Regulatory and Legislative Environment
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- The Pension Schemes Bill is introduced
- With a focus on the Pensions Dashboard…
- …and tackling pension transfer fraud
- Attention turns to improving the advice and speed of transfers
- Through the FCA…
- …and industry bodies
- Wake-up pack revamp could increase engagement…
- …while the DWP prioritises the self-employed
Companies and Brands – What You Need to Know
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- Royal London retains top spot
- A fall in DB transfers hits the larger SIPP providers
- AJ Bell prioritises advised customers
- New D2C products enter the market
- Penfold focuses on the self-employed
Provider Rankings
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- Royal London retains top spot
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- Figure 23: Rankings of top 10 providers of insurance-administered individual and group pension business, by total gross premium income, 2017 and 2018
- Decrease in DB transfers affects larger SIPP providers
Competitive Strategies
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- Established brands focus on improving engagement
- Lloyds and Scottish Widows
- L&G’s own Pensions Dashboard
- AJ Bell focusses on the advised market
- LV= unveils a new range of ESG funds
- New D2C products become more commonplace
- Through Fintech apps…
- …and D2C investment platforms
- New digital-only provider Penfold focuses on the self-employed
The Consumer – What You Need to Know
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- Confusion around pension ownership
- Almost half of workplace pension savers are not saving anywhere else
- Individual pension holders expect to turn to financial advice
- Just 6% intend to open an individual pension
- Converting interest into ownership is a challenge
- Individual pension holders are more engaged
- Clarity and transparency are key factors
Pension Ownership
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- Three quarters own a pension…
- …but there is confusion around type of pension held
- Significant scope for greater targeting of the self-employed
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- Figure 24: Type of pension owned, September 2019
- Most individual pension holders own more than one pot
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- Figure 25: Number of pension pots owned, by pension ownership, September 2019
Other Retirement Savings
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- 48% are relying on their workplace pension
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- Figure 26: Other retirement savings methods, by pension ownership, September 2019
- Convincing existing investors should be a key focus
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- Figure 27: Other retirement savings methods, by financial situation, September 2019
Attitudes towards Pensions and Retirement Planning
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- Individual pension holders are more confident about pensions…
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- Figure 28: Agreement with attitudes towards pensions, by pension ownership, September 2019
- …and are more likely to seek financial advice about their pension
- Millennials have good intentions but need help
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- Figure 29: Agreement with attitudes towards pensions and retirement planning, by pension ownership, September 2019
Future Retirement Plans
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- Just 6% plan on opening an individual pension within the next two years
- Millennials show more enthusiasm…
- …but Gen-Xers need to be convinced
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- Figure 30: Agreement with attitudes towards pensions and future retirement plans, by pension ownership, September 2019
- Converting interest to ownership among the self-employed will be key
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- Figure 31: Agreement with attitudes towards pensions and future retirement plans, by employment status, September 2019
- Individual pensions not a front-of-mind retirement planning solution
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- Figure 32: Agreement with attitudes towards pensions and future retirement plans, by response to the statement ‘I am currently planning for retirement’, September 2019
Pension Engagement
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- Personal pension holders are more engaged
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- Figure 33: Pension engagement, by pension ownership, September 2019
- Pension engagement split between online and offline methods
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- Figure 34: Channels used to check on the value of a pension, by pension engagement, September 2019
Individual Pensions: Most Important Factors
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- Clarity is the most important factor for individual pension holders
- Convenience is also a priority
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- Figure 35: Important factors among owners of individual pensions, September 2019
- Scope for greater product development across the market…
- …but there are significant obstacles when it comes to ethical investments
- Members who prioritise convenience save for retirement in many ways
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- Figure 36: Other retirement savings methods, by important factors among owners of individual pensions, September 2019
- Established brands have a distinct advantage
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- Figure 37: TURF Analysis – Important factors among owners of individual pensions, September 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Turf analysis methodology
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- Figure 38: Table – TURF Analysis – personal pensions and SIPPs, September 2019
Appendix – Market Size and Forecast
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- Total market forecast – best- and worst-case scenarios
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- Figure 39: Forecast of individual pension premiums, best- and worst-case scenarios, 2019-24
- Individual personal and stakeholder pension business – Regular premiums
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- Figure 40: Forecast of new regular-premium individual personal and stakeholder pension business – fan chart 2014-24
- Figure 41: Forecast of regular-premium individual pension premiums, best- and worst-case scenarios, 2019-24
- Individual personal and stakeholder pension business – Single premiums
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- Figure 42: Forecast of new single-premium individual personal and stakeholder pension business – fan chart 2014-24
- Figure 43: Forecast of single-premium individual pension premiums, best- and worst-case scenarios, 2019-24
- Forecast methodology
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