Home > Back to Publisher > Report Information

UK Individual and Group Pensions 2009

Datamonitor
July 31, 2009
943 Pages - SKU: DFMN2404910

Abstract Table of Contents Search inside this report Related Reports

Countries covered: United Kingdom

Introduction

This report provides a comprehensive analysis of the individual pensions market, sizing the market for individual pension products, as well as providing insight into the distribution dynamics in the market. The report gives focus on how providers and the pensions industry as a whole can boost pension savings amid the government's discussion of personal accounts to the individual pensions market.

Scope

Examines the current shape of the individual pensions market and explores factors that are currently limiting the sale of pensions products
Comprehensive analysis of key products and regulatory trends affecting the pensions market in 2009
Assesses the strategies to combat key barriers to save for pension provision with particular focus on market conditions and demographics

Highlights

The dominance of personal pensions in the individual pensions market has been overshadowed by the rise in popularity of SIPP products. Despite the strong prevalence of personal pensions in terms of both single and regular premium pensions new business, SIPPs have experienced the most impressive year-on-year growth over the last five years.

A great deal of uncertainty surrounds the future of personal pensions and stakeholder markets and much of its progression will also depend on the effects of the government's plans for personal accounts in potentially drawing investors away from these pension products.

Reasons to Purchase

Provides detailed analysis of developments in the individual pensions market such as personal accounts
Access Datamonitor's forecasts for the future market size of the UK Pensions market
Identify competitor innovations and dynamics, and changes taking place in the distribution dynamics of the market

Overview: Catalyst; Summary
EXECUTIVE SUMMARY: Table of figures; Table of tables
THE FUTURE OF THE UK PENSIONS MARKET
Introduction: Personal pensions and SIPPs continue to dominate the pensions market; The rise and rise of SIPPs have been subdued by the state of the economy; The regular premium market saw slight growth amid economic turmoil; The group personal pensions market has seen healthy growth over the past five years; Investor desire for self-control has been a driver for choice of product; Distributing SIPPs on an efficient wrap platform will give investors increased tax-efficiency and convenience; New SIPP powers to hold protected rights will increase flexibility and investment choice for consumers; Greater clarity of SIPPs is needed to prevent a mis-selling scandal; The increasing interest in SIPPs does not necessarily signal an end for personal and stakeholder pensions; Group personal pensions may play a key role in pensions beyond the introduction of Personal Accounts in 2012; Group SIPPs are expected to flourish, but their emergence should be treated with caution; The group SIPP market offers members a flexible and engaging product, with a range of investment options tailored to suit the different needs of members; There remain differences of opinion in the industry about the group SIPP product; Industry views of a group SIPP proposition depend on the provider's existing market; Most people are not well equipped to deal with the costs and risks involved in private pension provision; People must be able to separate the concepts of building up a pension fund and receiving pension income; Individuals are increasingly on their own in planning for retirement and need to understand the risks that they will shoulder; The universally accepted belief that over the long term equities deliver good private pensions may be in question; Demographic trends are making pension savings a necessity; People need to save for their retirement, but they are hindered by the perception of affordability; People are not prepared to take on higher pension savings during a market downturn; People need to be educated about striking the right balance between short- and long-term savings; Affordability and short-term views act as compound barriers to pension savings; People are not saving for the future, assuming they will be looked after by the buckling state system; Government reforms will not do enough to help individuals save for retirement; Individuals face bigger burdens on private savings to produce good pensions; The government hopes that Personal Accounts will address the problems of long-term retirement savings; Personal Accounts are unlikely to hit the target; The government is continually showing a lack of continuity on pension policy, undermining its importance; Public-sector pension reform is a slow and controversial process and may not boost pension savings; Leveling down employers' contribution through the Personal Accounts scheme will make pension provision worse; Employers may be tempted to minimize costs of Personal Accounts through lower employee salaries; However, a contributions ceiling has been set to prevent the weakening of existing pensions provision; The government should still ensure that it pays to save against the impact of means-testing; The government and industry must put more personal responsibility on consumers regarding retirement planning; The effectiveness of Personal Accounts is uncertain, and the market is becoming increasingly polarized between stakeholder and SIPP pensions; The pensions market faces regulatory changes from the Retail Distribution Review; The RDR will increase the quality of advice and promote transparency of charges in retirement planning; The RDR initiative aims to address current market failures; The latest proposal outlines a clear distinction between 'sales' and 'advice'; Customer-agreed remuneration will allow competitive forces to work in favor of consumers; Providers should take note of the need for a money guidance service for greater consumer access to retirement planning tools; The FSA alleges that many consumers may have been given the wrong pensions advice
THE FUTURE OF PRODUCT INNOVATION IN PENSIONS: Prudential and Standard Life head the competition in the pensions market; Prudential sits at the top spot in the single premium pensions market; Much of Prudential's strength comes from its launch of PruFund and PruSelect in late 2008; Prudential regularly reviews its business processes throughout market turmoil and has come out with positive perceptions from IFAs; Prudential has maintained IFAs' confidence in its financial stability; Standard Life dominates the regular premium pensions market in 2008; Standard Life offers customer-relevant solutions to address tough market conditions; Standard Life has created strong customer-focused brand platforms that engage its audience through the 'Active Money' SIPP; Innovative strategies from providers must address people's barriers to save; Affordability is a great concern amongst non-savers; Variable annuities can increasingly becoming part of a retirement and investment plan; Targeted marketing, rather than new product development, must be the focus; Providers and advisors should encourage people to exercise personal responsibility; Those who do not have a route into a pension scheme can always look into alternatives to pension saving; Individual Savings Accounts; Venture Capital Trusts; Property; Providers should target those approaching retirement who want to secure their retirement ambitions; Accumulators are aged between 50 and 59, but have lifestage complexity; Accumulators want their individual needs recognized with a personal service and are attracted to convenience; Providers should reward accumulators to incentivize this segment to save; Providers should also target those with aspirations of accumulating wealth; The pensions industry is missing the opportunity to harness the aspirer market; Connecting to the world and having a sense of belonging appeals to aspirers; Aspirers are increasingly seeking a purchase experience that is efficient and convenient; Providers should establish early relationships with aspirers to gain business when they accumulate wealth
THE FUTURE OF PENSIONS DISTRIBUTION: IFAs are well-established in the pensions market, but many are shifting their focus up-market; IFAs perceive that pensions will prove to be less difficult to sell than other products; IFAs will play a crucial role in the new pensions era; Regulatory changes to distribution represent a particular challenge to the sale of SIPPs; Online distribution remains a promising area in the individual pensions market; Wrap platforms may soon reach a proliferation peak
APPENDIX: Data; Definitions; Single premium policy; Regular premium; New business; Life-based savings products; In-specie contribution; Pension product definitions; Personal pensions; Stakeholder pensions; Group personal pensions (GPPs); DSS rebates; Employer-sponsored stakeholder pension; Self-invested personal pensions (SIPPs); ABI definitions of distribution channels; Independent financial advisors (IFAs); Direct sales forces; Tied agents; Multi-tied agents; Bancassurance; Direct marketing; Other; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: Forecasts single premium pensions new business, £m annual premium equivalent (APE), 2009-13; Table 2: Forecast regular premium pensions new business, £m APE, 2009-13; Table 3: Single premium pensions new business for the top 10 pensions companies 2008, £m APE; Table 4: Regular premium pensions new business for the top 10 pensions companies 2008, £m APE; Table 5: Total single and regular premium pensions new business by distribution channel, £m APE, 2004-08; Table 6: How do you see business in each of the following areas changing over the next six months?; Table 7: Forecast single and regular premium pensions new business by distribution channel, £m APE, 2009-13; Table 8: Single premium pensions new business premiums £m APE, 2004-08; Table 9: Regular premium pensions new business premiums, £m APE, 2004-08; Table 10: How do you rank the following companies in terms of their overall service?
List of Figures: Figure 1: Personal pensions and SIPPs still dominate single premium pension sales in 2008; Figure 2: The regular premium pensions market saw slender growth in 2008; Figure 3: SIPP products will rise in popularity over the next five years; Figure 4: Group personal pensions are forecasted to dominate the regular premium pensions market; Figure 5: Pressure on the working age population is increasing as more people begin to retire; Figure 6: Longer life expectancies are producing growth in the number of older people in the UK; Figure 7: Affordability is a strong barrier against saving for a pension; Figure 8: Prudential dominates the single premium pensions field, with the highest market share by percentage in 2008; Figure 9: The majority of advisors view Prudential as a financially stable life company; Figure 10: Standard Life heads the group of leading regular premium pension providers, with the highest market share by percentage in 2008; Figure 11: Standard Life effectively employs use of celebrity to promote its 'Active Money' SIPP; Figure 12: The accumulators are a significant part of the population in the UK; Figure 13: Lincoln Financial Group offers a gentle reminder to consumers of the future challenges they may face in their lifetime; Figure 14: IFAs dominate the distribution of pension products; Figure 15: Advisors believe pension business will see an increase over the next six months; Figure 16: IFAs will continue to be the predominant distribution channel in the pensions market

More United Kingdom Life Insurance Reports

Life Insurance in the UK, Key Trends and Opportunities to 2016 by Timetric
Synopsis The report provides in depth market analysis, information and insights into the UK life insurance market, including: The UK life insurance market’s growth prospects ...

Channel Metrics: Consumer Distribution Trends in UK Life Insurance (briefing) by Finaccord Ltd.
Channel Metrics: Consumer Distribution Trends in UK Life Insurance is the most detailed and up-to-date guide to distribution trends in life insurance in the UK ...

UK Life and Pensions Competitor Tracker Q4 2011 by Datamonitor
Datamonitor’s UK Life and Pensions Competitor Tracker records the developments in this highly competitive market over the last two quarters, while highlighting the most significant ...

General Insurance in the UK - Industry Market Research Report by IBISWorld
General Insurance in the UK Businesses in this industry underwrite insurance policies relating to property, casualty, liability and other general risks. In underwriting insurance policies, general ...

A Comprehensive Study Of The UK Life Assurance & Pensions Market In 2010, Rating & Valuing Each Of The 313 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

See all reports like this >>

More United Kingdom Reports

A Comprehensive Study Of The UK Video Conferencing Equipment Market In 2010, Rating & Valuing Each Of The 30 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Tableware Market In 2010, Rating & Valuing Each Of The 166 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Surveyors & Valuers Market In 2010, Rating & Valuing Each Of The 943 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Subsea Engineering Market In 2010, Rating & Valuing Each Of The 142 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Structural Engineering Consultancy Market In 2010, Rating & Valuing Each Of The 300 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

See all reports like this >>

UK Individual and Group Pensions 2009

Share this report

Other tasks

Research Assistance

Related Markets

Life Insurance Reports

Free Alert Me service