Pensions: Can we Afford to Retire? - Ireland

Published by: Mintel International Group Ltd.

Published: Feb. 1, 2007 - 76 Pages

Table of Contents

Introduction

Definitions

Geographical, national and regional definitions

Conversion factors

BMRB Target Group Index sample sizes

Abbreviations

Summary of Key Findings

Pensions crisis a reality

Successful government impact in RoI

Do consumers trust the pensions industry?

Performance of investment funds is heartening

More innovation present in NI market

Spend, spend, spend…

Invest rather than save

Women and part-time workers at risk

Poor and wealthy just as likely to have no pension provision in RoI

‘Retirement earnings is not my responsibility’

2007 - a critical year for the pensions industry

Market Background

State pension provision

Northern Ireland

Basic state pension

State Second Pension

Pension Credit

Republic of Ireland

Contributory state pension

Transitional state pension

Non-contributory state pension

Return on investment

Interest rates on the rise

Figure 1: eurozone interest rates, 1999-2006

Investment in the property market becoming less attractive

Pensions and savings providers can benefit

Internal Market Environment

Changes in UK Pensions Bill 2006

What will the Pensions Bill 2006 mean for the pensions market?

Changes in pensions in RoI

Shortfall in women’s contributions

Women live longer and on less

Return on investments

SSIA-related incentives to generate new business

Lack of faith

Broader Market Environment

An aging population

The clock is ticking on pensions time-bomb

Figure 2: Population, by age group, NI, 2000-20

More balance in RoI

Figure 3: Population, by age group, RoI, 2000-20

Retirees can now expect to live three years longer than in 1981

The growth of the grey market

NI

RoI

Public Sector Size

Market Size and Forecast

Value of pension fund assets

Figure 4: Total value of RoI pension fund assets, 2001-11

New pensions business

Figure 5: Size of new pension business, at current prices, NI, 2002-11

Market Segmentation

RoI segmentation analysis

Defined benefit schemes account for two thirds of market

Figure 6: Pension breakdown by pension type, RoI, 2006

Figure 7: Pension use, by pension type, RoI, 2002-06

Steady growth in company schemes in RoI

Increase in those relying on state pension provision

Increase in those with no pension provision at all

NI segmentation analysis

Figure 8: Pension use, by pension type, NI, 2002-06

Greater dependence on state pension in NI

Private pension use stagnant

State pension reliance increasing

Companies and Products

Northern Ireland

Figure 9: Pension providers, by market position 2005

The Big Four - Key Facts

Pension products available in NI

Stakeholder pensions

Who’s innovating?

Virgin Money - Virgin Pension

Halifax Stakeholder Pension and Stakeholder U-18

Personal pensions

Sample product

Standard Life PPFlex

SIPP

Sample product

Hargreaves Lansdown Vantage SIPP

Annuities

Legal & General annuities

Media and marketing

Republic of Ireland

Market share

Figure 10: Pensions market share, by premiums, RoI, 2006

The Big Four - Key Facts

PRSA

Self-directed pensions

Credit unions to sell PRSAs

Consumer: Who Have and Who Haven’t?

Who’s ready to retire?

Women making less provision

Women excluded from non-state pension participation in RoI

Women lag behind men in non-state pension provision in NI

Implications for the industry

Pension use determined by socio-economic group

RoI part-time workers significantly more dependent on state pension

Consumers with no pension provision

The number of those with no pension provision is rising

Figure 13: Proportion of consumers with no pension or NI contributions, RoI and NI, 2002-06

Young most likely to have no pension provision

RoI ABs and C1s just as likely to be without pension provision as Es and Fs

NI ABs least likely to be without pension provision

The Future

Consumers must take responsibility

Green paper keenly speculated

Impact of Pensions Bill

SSIA incentives to drive further growth

Appendix

Interest rates

NI

Figure 16: UK interest rates, 1999-2006

Return on investment

Figure 17: Investment returns for major RoI investments managers 2006

Life-expectancy

Figure 18: Life-expectancy at birth, men and women, NI and RoI, 1986-2014

Figure 19: Life-expectancy, Males, NI, 1981 and 2005

Figure 20: Life-expectancy, Males, RoI, 1981 and 2005

The growth of the grey market

Figure 21: Forecast population change, in thousands, by age, RoI, 2000-20

Figure 22: Forecast population change, in thousands, by age, NI, 2000-20

The state of the economy

Figure 23: Health of the economy, NI and RoI, 2002-07

Figure 24: Percentage in employment, by age group, NI and RoI, 2000-05

Figure 25: Average weekly earnings of full-time workers, by age group and gender, NI, 2005

Figure 26: Average weekly earnings, by age group, NI, 2000-05

Spending priorities

Figure 27: Consumer spending priorities, NI, 2003-06

Figure 28: Spending priorities, RoI, 2003-06

Figure 28: Consumers who indicated starting a pension fund and increased contributions as a top five spending priority, by gender, age, socio-economic group, working status and marital status, NI and RoI, 2006

Invest Rather Than Save

Figure 29: Property prices, RoI and NI, 2000-06

Pension Type by Gender

Republic of Ireland

Figure 30: Pension type, by gender, RoI, 2006

Northern Ireland

Figure 31: Pension type, by gender, NI, 2006

Pension use by age group

Republic of Ireland

Figure 32: Pension type, by age group, RoI, 2006

Northern Ireland

Figure 33: Pension type, by age group, NI, 2006

Pension type by socio-economic group

Republic of Ireland

Figure 34: Pension type, by socio-economic group, RoI, 2006

Northern Ireland

Figure 35: Pension type, by socio-economic group, NI, 2006

Pension type by working status

Republic of Ireland

Figure 36: Pension type, by working status, RoI, 2006

Figure 37: Pension type, by working status, NI, 2006

Lack of pension provision by gender

Figure 38: Proportion of consumers with no pension or NI contributions, by gender, RoI and NI, 2006

Lack of pension provision by age group

Figure 39: Proportion of consumers with no pension or NI contributions, by age group, RoI and NI, 2006

Lack of pension provision by socio-economic group

Figure 40: Proportion of consumers with no pension or NI contributions, by socio-economic group, RoI and NI, 2006

Apathy towards pension savings

Figure 41: Agreement with statement ‘Financial security after retirement is your own responsibility’, by gender, age, socio-economic group, ligestage, marital status, working status and presence of children, RoI and NI, 2006

Abstract

In response to increasing demand for data concerning the dynamic economy and growth markets of Northern Ireland and The Republic of Ireland, Mintel has developed a series of reports covering a wide variety of sectors within both of these dynamic regions. Each one provides detailed coverage of key drivers as well as providing the very latest volume and value data. Also included are assessments of emerging trends, the activities of existing market players, brand ownership details, supply structures, future scenarios and statistical forecasts.

The Irish Series is segmented in the same manner as Mintel's UK reports, namely Finance, Leisure, Market, Retail and 'Specials'. This provides unparalleled coverage and will be a must for all companies who are either already active in this region, or will be looking to enter these distinct marketplaces in the future.

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