This report provides a comprehensive analysis of the personal pensions market in the UK. Use Mintel’s consumer-led data to answer critical industry questions and accelerate your pension business’ insight strategy.
UK Personal Pensions Market – Current Landscape
The cost of living crisis has placed pressure on the personal pensions market, as some consumers have had to prioritise immediate expenses over long-term savings, leading to a reduction in personal pension contributions. However, with economic conditions improving, there is optimism for recovery. Consumers are expected to regain the capacity to increase their personal pension contributions, which should strengthen the market in the coming months.
Financial constraints are one of the main reasons for those who don’t have a personal pension. Considering the ongoing cost of living crisis, this is undoubtedly a valid barrier for many people. However, they are not the only barrier, with confusion about private pension options also playing a role in deterring non-pension holders. Improving transparency, providing educational resources, and clear communication about pension options could help overcome these barriers.
Pension consolidation presents a promising opportunity for the personal pensions market, as 33% of pension holders plan to consolidate their pots in the future. This not only simplifies management for consumers, but also allows providers to offer services that could enhance customer engagement.
UK Personal Pensions – Market Statistics
- Personal pension ownership: Half of pension holders now report having an individual personal pension, up from 2023. As awareness about flexibility and financial advantages increases, personal pension usage may increase.
- Personal pension consumer preferences: 44% of personal pension holders prefer to receive updates via statements by email, leading over post, website, and app updates.
- Personal pension barriers: Many of those who don’t have a personal, stakeholder, or SIPP pension say it’s because they don’t have enough disposable income to contribute to one.
UK Personal Pensions Market Report – What’s Inside?
Key Topics Analyzed in the Report
- Personal pensions market size and forecast with analysis.
- Ownership of savings products for retirement, including pensions.
- Insights into pension behaviours such as pension consolidation, identifying the barriers and factors driving consolidation decisions.
- Consumer attitudes towards pensions, including confidence and decision-making, and the need for guidance.
- Examination of pension providers’ strategies, including competitive approaches and innovative initiatives in the sector.
Report Scope
The main focus of this Report is on individual personal pensions, individual stakeholder pensions and individual SIPPs.
For the purposes of this Report, Mintel has used the following definitions:
- Personal pension – a DC pension scheme, set up as a contract between the individual member and the pension provider (usually an insurance company or investment platform). An employer may contribute to a member’s personal pension. Other people are also able to contribute. For example, a person may contribute to their partner’s personal pension, or even to a child’s personal pension.
- Stakeholder pension – a type of low-cost personal pension which must adhere to certain conditions set by the government. This includes the requirement that the AMC must not be more than 1.5% per year for the first 10 years of scheme membership and thereafter not more than 1%.
- Self-Invested Personal Pension (SIPP) – a type of personal pension, which offers individual investors greater flexibility and investment choice. There are two main sub-categories, catering for different markets: streamlined SIPPs, which mainly comprise lower-cost, simplified platform-based SIPPs and mid-range collective SIPPs; and full-range SIPPs. A full-range SIPP is essentially a SIPP in its purest (‘open architecture’) form, allowing every investment permitted by HMRC rules, including commercial property and more esoteric investment types such as derivatives, to be bought and held in the wrapper. Full-range SIPPs tend to have higher administration charges and a higher minimum investment requirement (typically £50,000).
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). More than half of all SIPPs in force are estimated to be non-insured.
Please note that market size and segmentation data provided by the ABI only covers insured SIPPs.
Meet the Expert Behind the Analysis
This report was written by Stefania Apostol. Stefania joined the Financial Services Reports team in March 2021, having previously worked for Mintel’s MFD, Disruptor and GNPD products. In her current role, she researches and writes Mintel Reports on consumer financial services in the UK.
The personal pensions market shows signs of recovery amid improved economic conditions, yet the cost of living crisis continues to pose challenges.
Stefania Apostol
Senior Financial Services Analyst
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Executive Summary
- Opportunities for the personal pensions market
- Pension consolidation presents an opportunity for market expansion
- More educational initiatives are needed to address pension challenges
- Help bridge the gender pension gap
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- New individual pension premiums are forecast for modest growth over the next five years
- Regular premium new contracts rose in 2023
- Graph 1: regular premium new contracts, by type, 2017-23
- Graph 2: single premium new contracts, 2017-23
- What consumers want and why
- Two-thirds of adults are saving for retirement
- Graph 3: how consumers are saving or investing for retirement, 2024
- Personal pensions are the most popular type of individual pensions
- Half of pension holders have either consolidated their pension pots or plan to do so
- Limited disposable income is the main reason for not having an individual personal pension
- Personal pension holders prefer digital channels for receiving information and making changes
- Graph 4: how consumers would prefer to receive information about their personal pensions, 2024
- Graph 5: how consumers would prefer to make changes to their personal pensions, 2024
- More than half of pension holders would like more guidance from their pension providers
- Innovation and marketing
- Banks venture into the pension market
- Pension providers are enhancing consolidation services
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Market Dynamics
- Market size
- Number of individual pensions remains in long-term decline…
- Graph 6: number of individual policies in force, 2017-23
- …but total in-force premium income increased in 2023
- Graph 7: total business in force premium income, 2017-23
- New individual pension premiums are expected to rise in 2024…
- Graph 8: total new individual pension premiums, 2017-24
- …driven by improved economic conditions
- Market forecast
- New individual pension premiums set for modest growth over the next five years
- Outlook for the new personal pensions market looks more positive
- Market segmentation
- Regular premium new contracts rose…
- Graph 9: regular premium new contracts, by type, 2017-23
- …while single premium new contracts declined in 2023
- Graph 10: single premium new contracts, 2017-23
- Total individual pension premiums increased by 2% in 2023
- Graph 11: total value of new individual personal pension, stakeholder pension and insured SIPP sales, 2017-23
- New personal pension transfers rise, but share declines
- Graph 12: value of new personal pension premiums transfers, 2017-23
- Channels to market
- Independent advisers account for most new personal pension business…
- Graph 13: new individual personal pension business, by sales channel, 2017-23
- …but restricted advice and non-advised sales continue to gain ground
- Graph 14: share of new individual personal pension business, by sales channel, 2017-23
- Advised SIPP sales continue to dominate
- Graph 15: new individual insured SIPP business, by sales channel, 2017-23
- Non-advised sales are more common in stakeholder pensions
- Graph 16: new individual stakeholder pensions business, by sales channel, 2017-23
- Market drivers
- The UK's economy improves
- Graph 17: CPI inflation rate, 2021-24
- Most people are still feeling the effects of higher prices
- Graph 18: cost-of-living-related issues noticed in the last two months, 2024
- Financial wellbeing is fragile
- Graph 19: the financial wellbeing index, 2016-24
- Pension participation remains stable
- Graph 20: all employees pension participation rate, 2009-23
- Self-employed workers are an important part of the workforce
- Graph 21: number of employees and self-employed workers (seasonally adjusted), 2000-24
- Legislative and regulatory changes
- New government announces pensions bill and review
- The Value for Money framework aims to enhance DC pension value
- The pensions lifetime allowance was abolished
- The government hopes to reduce the gender pension gap
- The FCA's Advice Guidance Boundary Review aims to address the advice gap
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What Consumers Want and Why
- Ownership of retirement savings products
- Two-thirds of adults are saving for retirement
- Graph 22: how consumers are saving or investing for retirement, 2024
- Generational differences in pension ownership
- Graph 23: pensions ownership, by generation, 2024
- Encourage women to engage in pensions
- Graph 24: pensions ownership, by gender and parental status, 2024
- Help self-employed workers save for retirement
- Household income impacts pension ownership
- Graph 25: pensions ownership, by household income, 2024
- Pension ownership
- Workplace pensions continue to dominate…
- Graph 26: pension ownership – NET, 2023-24
- …but individual pensions remain popular
- Personal pensions are the most popular type of individual pensions
- Graph 27: pension ownership, 2024
- Help younger generations enhance pension knowledge
- Graph 28: personal pension ownership, by generation, 2024
- Pension consolidation
- Half of pension holders have either consolidated their pension pots or plan to do so
- Graph 29: consolidation of pension pots, 2024
- Older generations are less likely to consolidate pension pots
- Graph 30: consolidation of pension pots, by generation, 2024
- Having only one pension pot is the main reason pension holders don't plan to consolidate
- Graph 31: barriers to pension consolidation, 2024
- Generation X needs enhanced clarity in pension consolidation
- Easy fund management is the primary reason for consolidation…
- Graph 32: reasons for pension consolidation, 2024
- …but reducing fees and charges is also another important factor
- Pension communication preferences
- Statements sent via email are the preferred method of communication
- Graph 33: how consumers would prefer to receive information about their personal pensions, 2024
- Older generations show a stronger preference for statements sent via post
- Graph 34: preference for statements sent via the post as a method of communication, by generation, 2024
- Apps are important for engaging younger groups
- Graph 35: preference for provider's mobile app as a method of communication, by generation, 2024
- Pension changes preferences
- Websites are the preferred choice for consumers to adjust personal pensions
- Graph 36: how consumers would prefer to make changes to their personal pensions, 2024
- Digital-native younger generations are much more keen on making changes via apps
- Graph 37: making changes to personal pensions via provider's website and mobile app, by generation, 2024
- Only a quarter would use a financial adviser to make changes to their personal pensions
- Graph 38: making changes to personal pensions via a financial adviser, by generation, 2024
- Barriers to individual personal pensions
- Limited disposable income is the main reason for not having an individual personal pension
- Graph 39: barriers to individual personal pensions, 2024
- Help those without individual pensions to understand them…
- Graph 40: selected barrier – "I find [personal penions] confusing", by household income, 2024
- …and better explain returns and fees
- Attitudes towards pensions
- High degree of confidence in making decisions about pensions…
- Graph 41: attitudes towards pensions, 2024
- …but confidence is lower among women, especially those nearing retirement
- Graph 42: confidence in making decisions about pensions, by gender and age, 2024
- More guidance is needed for those with individual pensions
- Graph 43: consumer agreement that they would like to receive more guidance from pension providers, by pension ownership, 2024
- Despite the cost-of-living crisis, pension holders remain hopeful
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Innovation And Marketing Trends
- Competitive strategies
- Aviva launches the ‘Find and Combine’ pension service
- Aegon introduces pension transfer service with rating system
- Aviva offers a pension scheme to Bolt's self-employed drivers
- Royal London introduces video workplace pension statements
- Legal & General launches new digital guidance for retirement
- Money and Pensions Service unveils Pension Wise Digital
- Scottish Widows launches a digital tool to raise awareness and understanding of the gender pension gap
- Intelligent Money enters administration, while Canada Life closes its personal pension product
- Launch activity and innovation
- Banks venture into the pension market
- Providers launch new pension plans to simplify investments
- Whitehall and Tillit introduce new SIPPs
- Advertising and marketing activity
- PensionBee continues its mission to make people 'pension-confident'
- Pension providers continue to focus on consolidation in adverts
- Gemma Collins fronts the new 'Pay Your Pension Some Attention' campaign
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Appendix
- Supplementary data
- New individual pension premiums
- New individual pension premiums – regular premium
- New individual pension premiums – single premium
- New individual pension contracts
- New individual pension contracts – regular premium
- New individual pension contracts – single premium
- Channels to market – total personal pensions premiums
- Channels to market – personal pensions premiums – regular premium
- Channels to market – personal pensions premiums – single premium
- Channels to market – total individual stakeholder pensions premiums
- Channels to market – individual stakeholder pensions premiums – regular premium
- Channels to market – individual stakeholder pensions premiums – single premium
- Channels to market – total insured individual SIPPs premiums
- Channels to market – insured individual SIPPs premiums – regular premium
- Channels to market – insured individual SIPPs premiums – single premium
- Market forecast data and methodology
- Market forecast and prediction intervals
- Forecast methodology
- Report scope and definitions
- Products covered in this Report
- Products covered in this Report (continued)
- Abbreviations and terms
- Methodology
- Consumer research methodology
- Nielsen Ad Intel coverage
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