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

SIPPs - UK - December 2016

“The SIPP market is increasingly diverging into two separate areas: lower-cost and lower-value platform SIPPs and full-range bespoke SIPPs. Despite the many challenges ahead, there is a place for both plan types. Bespoke providers will have to hold greater levels of capital, and yet more of them may be forced out of the market. But those who remain and employ stringent due diligence processes should be stronger as a result, contributing to a leaner and fitter marketplace.”
– Sarah Hitchcock, Senior Analyst – Financial Services

This report discusses the following key topics:

  • Good prospects for future growth, but still many challenges ahead
  • Opportunities abound in the decumulation market

For the purposes of this Report, Mintel uses the following definitions:

A self-invested personal pension (SIPP) is a type of defined-contribution personal pension that gives the investor greater flexibility and control over investment choice. Since its inception in 1989, the product has evolved to the point where there are now broadly two main product types, catering for different markets. These are:

  • Streamlined/platform SIPP offers investors access to a range of standard investments, such as equities, cash, collective investments and bonds, but which usually require the investor to use the ‘in-house’ share trading service or platform. They include lower-cost, simplified SIPPs (which typically have a low or no minimum investment) and mid-range collective SIPPs, which tend to be offered by insurance companies.
  • Full-range/bespoke SIPP is a SIPP in its purest form, allowing the widest choice of investments – including commercial property and more esoteric investment types such as derivatives – to be bought and held via a full range of investment counterparties. Full-range SIPPs tend to have higher administration charges and usually require a minimum investment of £50,000. Consequently, they are often taken out by the mass affluent, affluent and the high net worth (HNW), through the advised channel. They also tend to be run off platform, so may be referred to as non-platform based SIPPs.

SIPPs may also be categorised according to how they are legally structured, ie whether they are insured products (provided by insurance companies and established by deed poll) or non-insured products (written under trust). At least three fifths of all SIPPs in force are estimated to be non-insured.

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
            • Total SIPP assets are now worth £183 billion
              • Figure 1: Proportional distribution of volume and value of SIPPs in force, by sector, as August 2016
            • Annual sales are predicted to rise to over 1 million by 2021
              • Figure 2: Forecast of the volume of regulated SIPP sales – Fan chart, 2011-21
            • Distribution mix
              • Various factors driving demand…
                • …but there are many market pressures too
                  • Companies and brands
                    • Top five SIPP providers
                      • Figure 3: Estimated market share of the largest five SIPP providers, by AUA, 2016
                    • Market contraction continues
                      • Providers increase technology investment
                        • The consumer
                          • Around 3% of UK adults have a SIPP
                            • A small proportion of SIPP investors hold non-standard assets
                              • Figure 4: Investments held within SIPP, September 2016
                            • Fund switching and transfer activity
                              • Figure 5: Recent activity relating to SIPP investment strategy, transfers and switching, September 2016
                            • Recent decumulation activity
                              • Figure 6: Recent activity relating to SIPP decumulation, September 2016
                            • Recent changes to contribution levels
                              • Figure 7: SIPP contribution levels over the past year, September 2016
                            • 18% expect to increase their SIPP contributions over the coming year
                              • Figure 8: Expected SIPP contribution levels over the coming year, September 2016
                            • Fund monitoring frequency
                              • Figure 9: SIPP account monitoring frequency, September 2016
                            • Preferred channel to access account
                              • Figure 10: Preferred channel to access SIPP account, September 2016
                            • Decumulation timeframe
                              • Figure 11: Length of time planning for SIPP fund to last, September 2016
                            • SIPP investor strategies
                              • Figure 12: Approaches to SIPP investing and decision-making, September 2016
                            • What we think
                            • Issues and Insights

                              • Good prospects for future growth, but still many challenges ahead
                                • The facts
                                  • The implications
                                    • Opportunities abound in the decumulation market
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • There are 1.7 million SIPPs in force
                                            • Volume sales rise 6% in 2016
                                              • Distribution mix
                                                • Various factors driving demand…
                                                  • …but there are a number key challenges too
                                                  • Market Size and Forecast

                                                    • SIPP assets rise to over £180 billion
                                                      • Figure 13: Volume and value of SIPPs in force, as at August 2015 vs August 2016
                                                    • A diverging market
                                                      • New SIPP sales rebound in 2016
                                                        • Figure 14: Number of regulated SIPP sales, 2011-16
                                                      • Market forecast
                                                        • Solid growth prospects
                                                          • Figure 15: Forecast of the volume of regulated SIPP sales – Fan chart, 2011-21
                                                          • Figure 16: Forecast of new SIPP business, at current prices, 2011-21
                                                        • Forecast methodology
                                                        • Channels to Market

                                                          • A significant minority of SIPP sales come via direct channels…
                                                            • …but most new business is generated by intermediaries
                                                              • Figure 17: Proportion of FCA-regulated SIPP sales, by firm type, Year to June 2016
                                                          • Market Drivers

                                                            • Pension freedoms boost attractiveness of SIPPs
                                                              • Workplace auto-enrolment creates opportunities for future decumulation business
                                                                • Low interest-rate climate favours equity investment
                                                                • Regulatory and Legislative Changes

                                                                  • New CapAd rules come into force
                                                                    • Providers up their fees or introduce new ones to reflect the added cost of compliance
                                                                      • Difficulties with identifying and valuing non-standard assets
                                                                        • Some providers disclose margins on retained interest ahead of April-2017 deadline
                                                                          • Providers cease to accept in specie contributions
                                                                            • New Lifetime ISA is unlikely to pose much of a threat to SIPPs
                                                                              • Cuts to pension tax relief will impact some higher-value SIPP funds
                                                                              • Companies and Brands – What You Need to Know

                                                                                • The largest operators
                                                                                  • Market continues to contract
                                                                                    • Slowdown in new product launches, as providers invest more in technology
                                                                                    • Market Share

                                                                                      • Standard Life is the largest SIPP provider by AUA…
                                                                                        • …but Hargreaves Lansdown has the greatest number of SIPP accounts
                                                                                          • Curtis Banks consolidates its place in the top five with the acquisition of Suffolk Life
                                                                                            • James Hay and Mattioli Woods also make key acquisitions
                                                                                              • Figure 18: Estimated market share of the largest five SIPP providers, by AUA, 2016
                                                                                            • Fall in number of providers as market pressures intensify
                                                                                              • Figure 19: Number of regulated SIPP providers and percentage of total sales, by top five providers in each quarter, Q1 2008-Q2 2016
                                                                                          • Competitive Strategies

                                                                                            • Investment in platform technology
                                                                                              • Hornbuckle name change signifies expansion drive…
                                                                                                • …as parent, Embark shifts focus onto the platform sector
                                                                                                  • James Hay aims to diversify and become a full-service platform
                                                                                                    • Industry developments
                                                                                                      • New product launches
                                                                                                        • AXA sells its wrap platform and closes Family SIPP
                                                                                                          • Continued growth in third-party administration
                                                                                                          • The Consumer – What You Need to Know

                                                                                                            • Around 3% of UK adults have a SIPP
                                                                                                              • Only a minority hold non-standard assets
                                                                                                                • Pension transfers are common
                                                                                                                  • 20% of over-55s have drawn cash from their SIPP over the past year
                                                                                                                    • Majority take active approach to monitoring SIPP
                                                                                                                      • SIPP holders looking to the long-term
                                                                                                                        • 31% employ a passive investment strategy
                                                                                                                        • SIPP Asset Mix

                                                                                                                          • Proportion of SIPP investors holding cash is roughly the same as a year ago…
                                                                                                                            • …as rates on SIPP deposits fall…
                                                                                                                              • …although there is a marked increase in the proportion holding NS&I products
                                                                                                                                • Figure 20: Investments held within SIPP, August 2015 and September 2016
                                                                                                                              • 6% hold unlisted shares
                                                                                                                              • Investment, Transfer & Switching Activity

                                                                                                                                • Switching funds is fairly common
                                                                                                                                  • 14% have applied to protect their lifetime allowance within the past year
                                                                                                                                    • Figure 21: Recent activity relating to SIPP investment strategy, transfers and switching, September 2016
                                                                                                                                  • Transfers in outnumber transfers out
                                                                                                                                    • 20% say they are considering changing SIPP providers within the next 12 months…
                                                                                                                                      • Figure 22: Expected future activity relating to SIPP investment strategy, transfers and switching, September 2016
                                                                                                                                    • …but this may not be practical or straightforward for all
                                                                                                                                      • 21% of SIPP investors expect to transfer in funds
                                                                                                                                      • Decumulation Activity by the Over-55s

                                                                                                                                        • 20% of SIPP investors have withdrawn money from their SIPP over the past year…
                                                                                                                                          • Figure 23: Recent activity relating to SIPP decumulation, September 2016
                                                                                                                                        • … while 22% expect to do so over the next 12 months
                                                                                                                                          • Figure 24: Expected future activity relating to SIPP decumulation, September 2016
                                                                                                                                        • Drawdown will also remain popular
                                                                                                                                        • Changes in Contribution Level

                                                                                                                                          • More SIPP investors have upped their contributions than decreased them in the past year
                                                                                                                                            • Figure 25: SIPP contribution levels over the past year, September 2016
                                                                                                                                          • Around half expect to maintain their contributions at the current level over the next 12 months
                                                                                                                                            • Figure 26: Expected SIPP contribution levels over the coming year, September 2016
                                                                                                                                        • SIPP Monitoring & Account Access

                                                                                                                                          • One in five SIPP investors monitor performance at least once a week
                                                                                                                                            • Figure 27: SIPP account monitoring frequency, September 2016
                                                                                                                                          • 71% prefer to access their SIPP online or via a mobile app
                                                                                                                                            • Figure 28: Channel used to access SIPP account, September 2016
                                                                                                                                            • Figure 29: Preferred channel to access SIPP account, September 2016
                                                                                                                                          • Those who prefer to access their account online record a higher monitoring frequency rate
                                                                                                                                            • Figure 30: SIPP account monitoring frequency, by preferred channel to access SIPP account, September 2016
                                                                                                                                        • SIPP Decumulation Timeframe

                                                                                                                                          • 29% of SIPP investors want their accumulated fund to last them their whole lifetime…
                                                                                                                                            • …while 12% want to pass at least some of it on to family
                                                                                                                                              • 27% have much shorter decumulation timeframes
                                                                                                                                                • Figure 31: Length of time planning SIPP fund to last, September 2016
                                                                                                                                            • Investment Strategies

                                                                                                                                              • 37% of respondents are investing in a capital growth strategy…
                                                                                                                                                • …while 11% are seeking both growth and income
                                                                                                                                                  • Figure 32: Approaches to SIPP investing and decision-making, September 2016
                                                                                                                                                • 27% delegate investment decision-making to an adviser
                                                                                                                                                  • 31% employ a passive investment strategy
                                                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                                                    • Data sources
                                                                                                                                                      • Consumer research methodology
                                                                                                                                                        • Abbreviations
                                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                                          • Total market sales forecast – Best- and worst-case scenarios
                                                                                                                                                            • Figure 33: Forecast of regulated SIPP sales – Best- and worst-case scenarios, 2016-21
                                                                                                                                                          • Forecast methodology

                                                                                                                                                          Companies Covered

                                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                                          SIPPs - UK - December 2016

                                                                                                                                                          US $2,672.70 (Excl.Tax)