Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Personal Pensions - UK - April 2017

“The individual personal pension market offers good prospects for growth. A larger pool of pension savers due to auto-enrolment and prevailing mobility in the labour market will increase the tendency to accumulate multiple pension pots. In turn, this will drive pension transfer and consolidation activity. Moreover, there is scope to grow regular-premium business by targeting the self-employed and those interested in saving for children.”
– Sarah Hitchcock, Senior Finance Analyst

This Report discusses the following key topics:

  • Scope to target those wishing to save for children 
  • The self-employed are an underpenetrated market
  • New Lifetime ISA could pose a threat as a competitor product

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Regular-premium business continues to decline…
              • …while single-premium business is boosted by greater transfer activity…
                • …which will continue to drive overall market growth
                  • Figure 1: Forecast of new individual personal and stakeholder pension business – Fan chart, 2011-21
                • Larger proportion of direct sales in the smaller stakeholder market
                  • Workplace auto-enrolment indirectly benefits the individual sector
                    • Cap on exit fees and a new allowance for pension advice introduced
                      • Companies and brands
                        • Market experiences further consolidation
                          • Aviva’s acquisition of Friends Life makes it a market leader of contract-based pensions
                            • Prototype of Pensions Dashboard near completion
                              • Using the power of digital technology to educate and inform…
                                • …and to engage a younger audience
                                  • The consumer
                                    • Auto-enrolment boosts pension participation, but there are still significant gaps
                                      • Figure 2: Private pension ownership, by total sample and those in work, February 2017
                                    • 64% of individual pension holders are making regular contributions
                                      • Figure 3: Proportion of individual pension holders who are making contributions, by pension type, February 2017
                                    • The under-45s are the most active contributors
                                      • IFAs are the preferred choice for pensions advice
                                        • Figure 4: Sources of pension advice most likely to use for each activity, February 2017
                                      • Only 63% of individual pension holders know much how they are paying in charges
                                        • A much higher proportion are open to switching funds than have actually done so over the past five years
                                          • Opportunities for future growth
                                            • Figure 5: Intentions to open a (new) personal/stakeholder pension or SIPP, February 2017
                                          • 52% of 18-40-year-olds are interested in saving for retirement in a LISA
                                            • Figure 6: Agreement with statements about LISAs, February 2017
                                          • What we think
                                          • Issues and Insights

                                            • Scope to target those wishing to save for children
                                              • The facts
                                                • The implications
                                                  • The self-employed are an underpenetrated market
                                                    • The facts
                                                      • The implications
                                                        • New Lifetime ISA could pose a threat as a competitor product
                                                          • The facts
                                                            • The implications
                                                            • The Market – What You Need to Know

                                                              • Volume sales of new regular-premium personal and stakeholder pensions continue to fall
                                                                • Growth in single-premium business underpinned by greater transfer activity
                                                                  • Larger proportion of direct sales in the smaller stakeholder market
                                                                    • Workplace auto-enrolment indirectly benefits the individual sector
                                                                      • Cap on exit fees comes into force
                                                                      • Market Size and Forecast

                                                                        • Individual personal and stakeholder pensions attract very little virgin business…
                                                                          • Figure 7: New individual personal and stakeholder pension business, 2011-16
                                                                        • …but new pension freedoms have boosted transfer activity
                                                                          • Figure 8: Transfers as a share of new individual personal and stakeholder pension business, 2011-16
                                                                        • The average regular premium has risen over the past two years…
                                                                          • Figure 9: Average new individual personal and stakeholder pension regular premiums – new policies only, 2014-16
                                                                        • ...as has the average personal pension transfer premium
                                                                          • Figure 10: Average new individual pension single premium, by type, 2014-16
                                                                        • Market forecast: transfer business will continue to drive growth
                                                                          • Figure 11: Forecast of new individual personal and stakeholder pension business – fan chart, 2011-21
                                                                          • Figure 12: Forecast of new individual personal and stakeholder pension business, 2011-21
                                                                        • Forecast methodology
                                                                        • Channels to Market

                                                                          • IFAs dominate the sale of personal pensions
                                                                            • Figure 13: New individual personal pension business, by sales channel, 2013-16
                                                                          • Distribution mix differs in the smaller stakeholder pension market
                                                                            • Figure 14: New individual stakeholder pension business, by sales channel, 2012-16
                                                                          • Intermediary definitions
                                                                          • Market Drivers

                                                                            • The number of in-force individual pensions continues to fall…
                                                                              • Figure 15: Number of individual and group pensions in-force and number of occupational DC members, 2003-15
                                                                            • …while the workplace pension sector sees strong growth as a result of auto-enrolment
                                                                              • SIPPs represent the main growth area…
                                                                                • …but there is crossover between streamlined SIPPs and DIY personal pensions
                                                                                  • Low-interest rates and rising share prices favour investment
                                                                                  • Regulatory and Legislative Changes

                                                                                    • New pension freedoms boost attractiveness of pension saving
                                                                                      • 1% charge cap on early exit fees comes into force
                                                                                        • Treasury introduces ‘multiple uses’ pension advice allowance
                                                                                        • Companies and Brands – What You Need to Know

                                                                                          • Market experiences growing consolidation
                                                                                            • Aviva’s acquisition of Friends Life
                                                                                              • Development of a Pensions Dashboard is underway
                                                                                                • Pension providers harness digital technology
                                                                                                  • Limited above-the-line adspend
                                                                                                  • Provider Rankings and Market Share

                                                                                                    • Aviva moves into first place following acquisition of Friends Life
                                                                                                      • Figure 16: Rankings of top 10 providers of insurance-administered individual and group contract-based pension business, by gross premiums, 2015
                                                                                                  • Market Developments and Innovation

                                                                                                    • Consolidation activity
                                                                                                      • Aviva bolsters its position by joining forces with a key competitor
                                                                                                        • Aegon acquires Cofunds as it looks to become a platform business
                                                                                                          • Digital activity and new product launches
                                                                                                            • Helping pension savers understand their choices at retirement
                                                                                                              • Scottish Widows is working on improving its digital capability
                                                                                                                • Prototype of a Pensions Dashboard due to be unveiled imminently
                                                                                                                  • Prudential launches flexible personal pension
                                                                                                                  • Advertising and Marketing Activity

                                                                                                                    • Pension providers spend very little on above-the-line advertising
                                                                                                                      • Figure 17: Total above-the line, online display and direct mail advertising expenditure on pension products and advice, 2011/12-2015/16
                                                                                                                    • Aviva’s digital campaign
                                                                                                                      • Nielsen Ad Intel coverage
                                                                                                                      • The Consumer – What You Need to Know

                                                                                                                        • Only 45% of the self-employed have a private pension
                                                                                                                          • 64% of individual pension holders are making regular contributions
                                                                                                                            • IFAs are the preferred choice for pensions advice
                                                                                                                              • Only 63% of individual pension holders know how much they are paying in charges
                                                                                                                                • Opportunities for future growth
                                                                                                                                  • 52% of 18-40-year-olds are interested in saving for retirement in a LISA
                                                                                                                                  • Pension Ownership

                                                                                                                                    • Around a third of UK adults still have no pension savings…
                                                                                                                                      • Figure 18: Private pension ownership, by total sample and selected demographic groups, February 2017
                                                                                                                                    • …with ownership lowest among non-workers
                                                                                                                                      • 10% of adults don’t know if they have an individual or group pension
                                                                                                                                        • Many people have multiple pension pots
                                                                                                                                          • Figure 19: Cross-analysis of private pension ownership, by type of pension, February 2017
                                                                                                                                      • Pension Contribution Activity

                                                                                                                                        • 69% of individual pension holders are making contributions
                                                                                                                                          • Figure 20: Proportion of individual pension holders who are making contributions, by pension type, February 2017
                                                                                                                                        • The under-45s are the most active contributors
                                                                                                                                        • Sources of Pension Advice

                                                                                                                                          • IFAs seen as main source of advice for personal pensions
                                                                                                                                            • Figure 21: Sources of pension advice most likely to use for each activity, February 2017
                                                                                                                                          • Over-45s prefer to speak to an adviser in person or over the phone
                                                                                                                                          • Pension Engagement and Switching Activity

                                                                                                                                            • 73% of individual pension savers read their annual benefit statement
                                                                                                                                              • Figure 22: Agreement with statements about pension understanding, switching activity, satisfaction with performance and alternative savings, February 2017
                                                                                                                                            • Individual pension providers have to be proactive
                                                                                                                                              • Individual pension providers are not required to annually disclose all charges to customers
                                                                                                                                                • 59% of individual pension holders have online access
                                                                                                                                                  • 60% are pleased with how their pension is performing
                                                                                                                                                    • 60% are open to switching funds
                                                                                                                                                    • Future Consideration of Personal Pensions

                                                                                                                                                      • Good scope to attract new customers
                                                                                                                                                        • Figure 23: Intentions to open a (new) personal/stakeholder pension or SIPP, by total sample and existing pension holders, February 2017
                                                                                                                                                      • 9% of adults would consider opening a personal pension for someone else
                                                                                                                                                      • Interest in LISAs among Target Age Group

                                                                                                                                                        • Around half of under-40s would be interested in opening a LISA to save for their retirement
                                                                                                                                                          • Figure 24: Agreement with statements about LISAs, February 2017
                                                                                                                                                        • Putting the threat into context
                                                                                                                                                          • Figure 25: Agreement with (selected) statements about LISAs, by existing pension holders, February 2017
                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                        • Total market forecast – Best- and worst-case scenarios
                                                                                                                                                          • Figure 26: Forecast of individual personal and stakeholder pension premiums – best- and worst-case scenarios, 2016-21
                                                                                                                                                        • Regular-premium sector
                                                                                                                                                          • Figure 27: Forecast of new regular-premium individual personal and stakeholder pension business – fan chart, 2011-21
                                                                                                                                                          • Figure 28: Forecast of individual personal and stakeholder pension regular premiums – best- and worst-case scenarios, 2016-21
                                                                                                                                                        • Single-premium sector
                                                                                                                                                          • Figure 29: Forecast of new single-premium individual personal and stakeholder pension business – fan chart, 2011-21
                                                                                                                                                          • Figure 30: Forecast of individual personal and stakeholder pension single premiums – Best- and worst-case scenarios, 2016-21
                                                                                                                                                        • Forecast Methodology
                                                                                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                                                                                            • Abbreviations
                                                                                                                                                              • Consumer research methodology

                                                                                                                                                              Personal Pensions - UK - April 2017

                                                                                                                                                              US $2,648.76 (Excl.Tax)