2023
9
UK Retirement Planning Market Report 2023
2023-06-16T04:10:24+01:00
OX1158181
2195
164215
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Report
en_GB
“There is ample scope to expand the market for retirement planning and advice. 40% of pension savers are interested in paying for personalised advice about their retirement plans, most of…

UK Retirement Planning Market Report 2023

£ 2,195 (Excl.Tax)

Description

Mintel’s UK Retirement Planning Market Report examines consumer attitudes towards retirement planning, provides an overview of the UK pension market and upcoming regulatory and legislative changes.

Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.

Key Topics Covered in this Report

  • The impact of high inflation on consumers and the market for retirement planning.
  • The preparations people are making/intending to make for their retirement and later life.
  • Interest in the concept of a pension dashboard and the free guidance service, Pension Wise.
  • Use of, and appetite for, professional advice and retirement planning services.
  • Interest in digital retirement planning guidance tools, and what specific features/functionality people are looking for.

UK Retirement Planning – Current Landscape

Workplace auto-enrolment has dramatically improved pension participation in the UK. Over three-quarters of UK adults own a private pension and 46% are making contributions, with participation rates highest among the 35-44 year olds.

However, the ongoing cost-of-living crisis means most consumers are feeling the squeeze on their income. This is limiting people’s saving capability, including their ability to contribute to a pension. In 2022, Mintel’s market research found that almost half of over-45s said they had less money available to put towards retirement as a result of rising inflation.

UK Retirement Planning Consumer Trends

While many people have made some retirement plans and preparations, a large number of them overlook one of the most important elements of retirement planning for those with a pension: completing a death benefit form. Mintel found that only 41% of pension savers had completed a form. This speaks to a wider trend in retirement planning in general: procrastination. Psychological barriers such as this are arguably the biggest threats to the retirement planning market. Many people are interested in making preparations for their retirement and later life, but few actually get around to working out concrete plans and putting them into action. They need nudging, guidance and effective shortcuts.

Purchase our full UK Retirement Planning Market Report for a comprehensive overview of consumer attitudes towards planning for retirement, including the products they are using and the preparations they are making. For further information on retirement income products, take a look at our UK Annuities and Income Drawdown Market Report.

Expert Analysis from a Financial Services Specialist

This report, written by Sarah Hitchcock, a leading financial services analyst, delivers in-depth commentary and analysis to highlight current trends in the UK retirment planning market and add expert context to the numbers.

There is ample scope to expand the market for retirement planning and advice. 40% of pension savers are interested in paying for personalised advice about their retirement plans, most of whom have not sought advice before. Pension providers and advisers have an opportunity to leverage technology to convert this interest into positive action and engagement, at low cost to the consumer.

Sarah Hitchcock
Associate Consultant – Financial Services

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • Scope of this Report
          • Definitions of terms used in the Report
          • Executive Summary

              • The five-year outlook for retirement planning and advice market
                • Figure 1: Retirement planning and advice market outlook, 2023-27
              • The market
                • The pension intermediary market
                  • Workplace auto-enrolment has massively boosted pension participation…
                    • Figure 2: Proportion of UK adults who own a private pension and are contributing to one, by age, 2023
                  • …and the pool of DC pension savers
                    • Sharp rise in the number of DC pension pots being accessed for the first time…
                      • …mostly without advice
                        • Figure 3: Number of DC pension pots accessed for the first time, by use of advice or guidance, 2021/22
                      • Dashboard rollout delayed again
                        • Consumer Duty prompts firms to review their retirement income advice propositions
                          • The consumer
                            • The target market for retirement planning is large, diverse and mutable
                              • Figure 4: Segmentation of pension savers, by pension phase and contribution status, 2023
                            • A large minority have no idea what their pension savings are worth
                              • Figure 5: Proportional distribution of pension savers, by value of pension savings, 2023
                            • Many hope to use a broad range of retirement income sources
                              • Figure 6: Other sources of income either using or expecting to use in retirement, by pension savers and non-pension savers, 2023
                            • People often need help or a nudge to make important plans and preparations
                              • Figure 7: Retirement plans or preparations made or interested in making, 2023
                            • Many over-50s put off seeking guidance
                              • Figure 8: Proportion of over-50s who have used, or are interested in using, Pension Wise, 2023
                            • The digitisation of retirement planning will increase engagement and positive action
                              • Figure 9: Assessing interest in selected features of a digital retirement planning service, 2023
                          • Issues and Insights

                            • Technology can make retirement planning less arduous and overwhelming
                              • Digital retirement planning tools are set to become more sophisticated and comprehensive…
                                • …helping to engage pension savers from a younger age
                                • Size of the Retirement Planning Intermediary Market

                                  • The five-year outlook for the retirement planning market
                                    • Figure 10: Retirement planning and advice market outlook, 2023-27
                                  • A variety of companies serve the market for retirement planning
                                    • Figure 11: Number of regulated retail investment advisers, by type of firm, 2021
                                  • Financial advisers play a huge role in this market
                                    • Figure 12: Number of regulated financial advice firms reporting revenue and total revenues, 2017-21
                                  • 90% are small firms
                                    • Figure 13: Financial adviser firms, by size of firm, 2021
                                • Market Environment: Pension Accumulation

                                  • Three quarters of UK adults have a pension
                                    • Figure 14: Proportion of UK adults who own a private pension and are contributing to one, by age, 2023
                                  • Many over-65s still have pension savings to draw on
                                    • DC pension pool stabilises
                                      • Figure 15: Number of DC pension plans in accumulation and total value of assets under management, 2017-22
                                    • Nest, The People’s Pension and NOW: Pensions continue to grow membership
                                      • Figure 16: Number of members and assets under management for selected master trusts, 2022
                                    • DB to DC transfers continue to fall
                                      • Figure 17: Number of DB to DC transfers (year to March), 2018-22
                                  • Market Environment: Pension Decumulation

                                    • More people dip into their pensions as cost-of-living pressures rise
                                      • Over half of all pension pots accessed are fully withdrawn
                                        • Figure 18: Number of DC pension pots accessed for the first time, by usage, 2018/19-2021/22
                                      • Many fail to take advice, or guidance, before accessing their pension
                                        • Figure 19: Number of DC pension pots accessed for the first time, by use of advice or guidance, 2021/22
                                      • Retirement income product sales start to recover
                                        • Figure 20: Number of new pension annuity and income drawdown sales, 2014-22
                                      • Annuities have become more appealing, but this may not benefit advisers
                                        • Roughly two fifths of drawdown sales are now non-advised…
                                          • …prompting the FCA to strengthen consumer protections
                                          • Market Drivers

                                            • Consumers’ sense of financial wellbeing continues to erode…
                                              • Figure 21: Household financial wellbeing index, 2016-23
                                            • …as inflation and rate rises take their toll…
                                              • Figure 22: Proportion of adults who have been impacted by price increases and related issues, by age, 2023
                                            • …reducing consumer spending power and hampering the ability to save
                                              • Challenging conditions increase the need for guidance and advice
                                              • Regulatory and Legislative Changes

                                                • Pension dashboards suffer further delay
                                                  • FCA intervenes to ensure customers are given stronger nudges to use guidance
                                                    • FCA launches thematic review of the retirement income advice market
                                                      • New Consumer Duty comes into force this year
                                                        • Firms must act to avoid causing foreseeable harm to customers
                                                        • Advertising and Marketing Activity

                                                          • Trivial amount spent on above-the-line advertising…
                                                            • Figure 23: Total above-the-line, online display and direct mail advertising expenditure on pensions and retirement planning, 2021 and 2022
                                                          • …but this is set to change with the development of new digital services
                                                            • Nielsen Ad Intel coverage
                                                            • Brand Research

                                                                • Brand map
                                                                  • Figure 24: Attitudes towards and usage of selected brands, 2023
                                                                • Key brand metrics
                                                                  • Figure 25: Key metrics for selected brands, 2023
                                                                • Brand attributes
                                                                  • Figure 26: Attitudes, by brand, 2023
                                                                • Brand analysis
                                                                  • Legal & General is the best-performing brand
                                                                    • Royal London provides a positive experience
                                                                      • Retiready from Aegon needs to build awareness…
                                                                        • …as does Guiide, which has the fun factor
                                                                          • PensionBee’s high level of adspend has helped to establish its brand
                                                                            • Pension Wise still has work to do to convince its target audience of its value
                                                                            • Pension Ownership and Participation

                                                                              • Three in four UK adults have a pension
                                                                                • Figure 27: Types of private pension owned, by age, 2023
                                                                              • 80% of under-55s are making regular contributions
                                                                                • Figure 28: Proportion of under-55 pension savers making contributions, by age, 2023
                                                                              • Participation rate is lower among part-time workers
                                                                                • The self-employed are less likely to have a pension
                                                                                  • Auto-enrolment has helped narrow the gender pension gap
                                                                                    • 6% of over-65s are still paying into their pension
                                                                                      • 5% of under-65s are retired
                                                                                        • Figure 29: Proportion of over-55 pension savers who are making contributions or have accessed pension, by age, 2023
                                                                                      • Retirement planning encompasses both accumulation and decumulation needs
                                                                                        • Figure 30: Segmentation of pension savers, by pension phase and contribution status, 2023
                                                                                    • Pension Value

                                                                                      • 44% of pension savers have combined pension savings worth under £30,000
                                                                                        • Figure 31: Total value of pension savings, by age, 2023
                                                                                      • 27% have no idea what their pension savings are worth
                                                                                        • Figure 32: Total value of pension savings, by type of pension, 2023
                                                                                    • Non-pension Sources of Retirement Funding

                                                                                      • Pension savers are more likely than non-pension savers to draw on a range of sources to fund their retirement
                                                                                        • Figure 33: Other sources of income either using or expecting to use in retirement, by pension savers and non-pension savers, 2023
                                                                                      • Less than half of adults include the state pension in their retirement plans
                                                                                        • A small proportion plan to release equity from their home
                                                                                          • One in five expect to benefit from their partner’s pension
                                                                                          • Retirement Plans and Preparations

                                                                                            • 59% of pension savers have not nominated beneficiaries…
                                                                                              • …yet around half are interested in doing so
                                                                                                • Figure 34: Retirement plans or preparations made or interested in making, 2023
                                                                                              • 42% are keen to consolidate their pensions
                                                                                                • Figure 35: Interest in completing retirement plans or preparations (netted), 2023
                                                                                              • Considerable demand for personalised advice
                                                                                                • Many over-50s are delaying seeking guidance from Pension Wise…
                                                                                                  • Figure 36: Retirement plans or preparations made or interested in making – Over-50s only, 2023
                                                                                                • …possibly because they are put off by the need for preparation
                                                                                                • Interest in Digital Retirement Planning

                                                                                                  • Strong interest in digital retirement planning tools
                                                                                                    • Figure 37: Interest in selected features of a digital retirement planning service, 2023
                                                                                                  • 39% are interested in viewing all their pensions in one place
                                                                                                    • Retirement planning tools will improve engagement with younger adults
                                                                                                      • Figure 38: Assessing interest in selected features of a digital retirement planning service, by age, 2023
                                                                                                  • Appendix – Abbreviations and Data Sources

                                                                                                    • Abbreviations
                                                                                                      • Consumer research methodology

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