Table of Contents
- Issues in the Market
- Key issues
- Market Background and Definitions
- Pension based retirement planning
- Figure 1: Types of private pension provision in the UK
- Occupational schemes
- Individual pensions
- Group pensions
- Benefit structures
- Other definitions
- Non-Pension based retirement planning
- ISAs
- Buy-to-Let
- Equity Release
- Lifetime mortgages
- Home reversion
- Investment bonds from life offices
- Collective investments
- Abbreviations
- Advertising data
- Market in Brief
- The market for Individual and occupational pensions
- Figure 2: Total new premiums paid into individual and insurance-
administred occupational pensions, 2003-07
- Non-Pension alternatives
- Figure 3: Ownership of savings and investments outside a pension, June
2008
- People will be spending more time in retirement
- Figure 4: Cohort life-expectancy at age 60, by gender, 1981-2054
- Affordability a major barrier to saving for retirement
- Figure 5: Reasons for not saving, June 2008
- Intermediaries dominate distribution
- Key consumer research findings
- Investment Preferences and Barriers to Saving
- Retirement Plans
- Internal Market Environment
- Key points
- Pension provision on the decline as firms look to reduce liability
- Figure 6: Status of private and public sector schemes, 2007
- A migration towards DC occupational pension schemes...
- ...but with inadequate contribution levels
- Active membership in the private sector in decline
- Figure 7: Number of occupational scheme members, by membership type and
sector, 1991-2007
- Some employees fail to enrol in company schemes
- Affordability a major issue
- Figure 8: Reasons for not saving, June 2008
- Psychological barriers to saving
- Past slip-ups contribute to a lack of faith in retirement planning
- Personal accounts set to arrive by 2012...
- ...with a variety of potential effects
- Legislative issues
- A-day changes aim to encourage greater pension participation
- ...and also create new opportunities for providers
- Significant changes in Capital Gains Tax
- IHT and Equity release
- The Retail Distribution Review
- Broader Market Environment
- Key points
- More time being spent in retirement
- Figure 9: Cohort life-expectancy at age 60, by gender, 1981-2051
- Old age dependency ratio to rise despite adjustments to retirement age
- Figure 10: Projected size of the UK population, by age band, 2008-46
- Pensioner income squeezed as more time is spent in retirement
- Figure 11: Average gross weekly income of pensioner units*, by age,
2006/07
- More attention on savings expected...
- ...but current difficulties will make saving hard for many
- Figure 12: Monthly changes in annual inflation rates* for RPI and CPI --
UK, August 2001-August 2008
- Inflationary pressure on long-term investment returns
- More people likely to be working beyond retirement age
- Figure 13: UK Economic activity, by gender and age, 2002-10
- Property wealth will increasingly be used to fund retirement
- Figure 14: UK standardised average house prices (seasonally adjusted)
1995-2008
- Equity release to rise in popularity
- Consumer Context
- Key points
- Savings and debt repayment top the agenda
- Figure 15: Savings, investment, borrowing and debt repayment --
consumers' expected activity, June 2007-June 2008
- Affluent and wealthy to increase activity levels
- Figure 16: Expected financial activity, by socio-demographic and income
groups, March 2008 and average for the last 23 quarters
- Prospects improve for life & pension providers
- Figure 17: Intended life and pensions* activity Q3/Q4 2002-Q2 /Q3 2008
- Cash-based savings on the rise
- Figure 18: Intended cash-based activities, Q3/Q4 2002-Q2 / Q3 2008
- Weak investor sentiment
- Figure 19: Intended purchases of shares and equity-based unit trusts,
government and corporate bonds and bond-based unit trusts and sales of
equities and unit trusts, Q3/Q4 2002-Q2/Q3 2008
- Strengths and Weaknesses in the Market
- Figure 20: Retirement Planning -- SWOT analysis, 2008
- Retirement Planning Product Ownership Overview
- Key points
- Pension product ownership
- Figure 21: Ownership of pension products, by type, June 2008
- Non-pensions retirement planning products
- Figure 22: Ownership of savings and investments outside a pension, June
2008
- Market Size -- Pensions
- Key points
- Individual vs. occupational pension schemes
- Figure 23: Total new premiums paid into insurance-administered
individual and occupational pensions, 2003-07
- Occupational Pension Scheme Size
- The private sector decline in employer support for pensions
- Figure 24: Number of private sector occupational pension schemes in the
UK, by scheme size, 2002-07
- Insurance-administered sector
- Rise in value of in-force business continues in 2007
- Figure 25: Insurance-administered occupational pension business in
force, 2003-07
- Lump-sum investment drives new business growth
- Figure 26: New insurance-administered occupational pension business,
2003-08 H1
- Personal and group pensions
- A progressive decline in individual personal pensions in force business
- Figure 27: Total number of policies and regular premiums from individual
pensions business in force, by pension type, 2003-07
- Positive growth in new personal and group pension business
- Figure 28: New individual pension premiums, by product type, 2003-07
- SIPPs and GPPs drive growth
- Non-Pension Alternatives -- Long term Savings and Investment
- Key points
- Investment bonds
- Figure 29: Total number of new single-premium investment bond contacts
and value of new premiums, 2001-07
- Collective investments
- Figure 30: Retail sales of unit trusts and OEICs by IMA members,
1998-2008
- ISAs
- Figure 31: Amounts subscribed to ISAs, by cash and stocks and shares
components, 2002/03-2007/08
- NS&I savings products
- Figure 32: Amounts invested in NS&I annually and total funds held,
2001/02-2006/07
- Non-Pension Alternatives -- Property-based
- Key points
- Buy-to-let
- Figure 33: Value and volume of buy-to-let mortgages in the UK, 2000-08
- Equity release
- Figure 34: Total volume of equity release sales and average value of
loan by SHIP members, 1997-2007
- Brand Communication and Promotion
- Key points
- Retirement planning related adspend up by nearly a fifth in past year
- Figure 35: Retirement planning related advertising expenditure, by
sub-category, 2004-08
- Top three advertisers account for more than a quarter of total adspend
- Figure 36: Retirement planning related advertising expenditure by the
top twenty advertisers, 2004-08
- Majority of advertising through the press
- Figure 37: Retirement planning related advertising expenditure, by media
type, 12 months to June 2008
- Channels to Market -- Pensions
- Key points
- Most pensions sold with advice
- Figure 38: Sources of retirement planning advice, June 2008
- The EBC aspect of group pension sales
- Personal pensions
- Figure 39: New APE* premiums into individual pensions, by distribution
channel, 2003-07
- Tied agents lead sales of Individual stakeholder pensions
- Figure 40: New regular premiums into individual pensions, by type of
pension and distribution channel, 2007
- Bancassurance has a prominent role in stakeholder pension distribution
- Figure 41: New regular premiums into individual pensions, via
bancassurance, and by type of pension, 2005-07
- Channels to Market -- Non-Pension
- Key points
- Investment bonds
- Figure 42: Investment bond distribution mix based on new premiums,
2003-07
- Collectives
- Figure 43: Proportion of unit trust/OEIC gross retail sales, by
distribution channel, 2001-08
- Investment ISAs
- Figure 44: Proportion of unit trust/OEIC ISA sales, by distribution
channel, 2001-08
- Buy-to-let
- Figure 45: Main channels to market -- illustration, 2008
- Equity release
- Figure 46: Value sales of equity release products from SHIP members, by
distribution channel, 2003-07
- The Consumer -- Savings and Pension Ownership
- Key points
- Savings gap yet to be closed
- Figure 47: Ownership of pension products, by type, June 2008
- The haves and the have-nots
- Figure 48: Ownership of pension products and retirement savings --
cross-analysis, June 2008
- Picking the winnable battles
- Figure 49: Type of pension owned. by gender, age, socio-economic group,
working status and household income, June 2008
- Supplementing the pension...
- ...and opening up new opportunities?
- Gaining perspective
- Figure 50: Type of pension owned by marital status, lifestage, Mintel' s
Special Groups and tenure, June 2008
- Broadsheet readers topping up their pension savings
- Figure 51: Type of pension owned by region and ACORN category, new
technology usage, and newspaper readership, June 2008
- Have a pension -- but no idea what it' s worth
- Figure 52: Value of pension fund, June 2008
- Slightly higher awareness among DC pension holders...
- Figure 53: Value of pension fund, by type of pension owned, June 2008
- The gender gap -- value and awareness
- Figure 54: Value of pension fund, by gender and age group, June 2008
- ABs setting themselves for retirement
- Figure 55: Value of pension fund, by socio-economic group, June 2008
- Outside pensions, cash rules...
- Figure 56: Ownership of savings and investments outside a pension, June
2008
- ...although ABs are prepared to spread their investments
- Figure 57: Ownership of savings and investments outside a pension, by
socio-economic group, June 2008
- Figure 58: Most and least likely to own savings and investments outside
a pension, June 2008
- Considerable gaps in coverage
- Pre-empting the regulators
- The Consumer -- Investment Preferences and Barriers to Saving
- Key points
- The intentions are good...
- Figure 59: Saving behaviour, July 2008
- ...or good-ish, at least
- Last minute panic?
- Figure 60: Saving behaviour, by gender, age, socio-economic group,
marital status and lifestage, July 2008
- Home first -- then pension?
- Figure 61: Saving behaviour, by working status, household income,
tenure, region, ACORN group and media usage, July 2008
- Is property still the investment of choice?
- Figure 62: Best investment choice for the medium- to long-term, June 2008
- A bad choice -- but for a good reason?
- Men take a punt on the markets
- Figure 63: Best investment choice for the medium- to long-term, by
gender, age, socio-economic group, marital status and lifestage, June 2008
- Online education?
- Figure 64: Best investment choice for the medium- to long-term, by
working status, household income, tenure, region, ACORN group and media
usage, June 2008
- Affordability the main barrier
- Figure 65: Reasons for not saving, by age, gender and socio-economic
group, June 2008
- Recognise what can be changed, and what can' t
- Are pensions really unaffordable?
- Figure 66: Savings priorities among those who say they can' t afford to
contribute towards a pension, June 2008
- Affordability an issue, regardless of affluence
- Figure 67: Reasons for not saving, by age, gender and socio-economic
group, June 2008
- Apathetic youngsters, cash-strapped families
- Figure 68: Reasons for not saving, by lifestage, June 2008
- First worry about the roof over your head
- Figure 69: Reasons for not saving, by working and housing status, June
2008
- Learning lessons from past experience?
- An education in affordability?
- Figure 70: Reasons for not saving, by media usage, June 2008
- The Consumer -- Retirement Plans
- Key points
- Living in dreamworld?
- Figure 71: Age planning to retire, by pension holders and non-pension
holders, June 2008
- Or just trying not to think about things?
- Figure 72: Age planning to retire, by pension holders and non-pension
holders, June 2008
- Time to place cruise adverts in the broadsheets?
- Figure 73: Age planning to retire, by household tenure, Region, ACORN
group and media usage, June 2008
- How front of mind is retirement?
- Figure 74: Agreement with the statement "I' m worried about what I' ll do
for money when I' m retired", June 2008
- Confidence among the dissenters?
- Figure 75: Agreement with the statement "I' m worried about what I' ll do
for money when I' m retired", by pension ownership, June 2008
- How long are people' s time horizons?
- Figure 76: Agreement with the statement "I' d rather live for today than
worry about what might or might not happen in 20 or 30 years time", June 2008
- Figure 77: Agreement with the statement "I' d rather live for today than
worry about what might or might not happen in 20 or 30 years time", by
pension ownership, June 2008
- Property squeezing out pension savings?
- Figure 78: Agreement with the statement "My priority is getting
onto/moving up the property ladder, not saving for retirement", June 2008
- Figure 79: Agreement with the statement "My priority is getting
onto/moving up the property ladder, not saving for retirement", by pension
ownership, June 2008
- Youngest respondents care about property, not retirement
- Figure 80: Agreement with statements regarding longer-term financial
attitudes, by gender, age, affluence and lifestage, June 2008
- Home ownership -- the ultimate security blanket?
- Figure 81: Agreement with statements regarding longer-term financial
attitudes, by working status, housing tenure, region, ACORN group and media
usage, June 2008
- Changing time horizons
- Appendix -- The Consumer: Pension Ownership and Saving
- Figure 88: Non-pension savings, by socio-economic group, July 2008
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