Workplace Pensions - UK - June 2017


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Mintel

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Whilst consumers clearly recognise the importance of paying into a workplace pension, many do not translate their attitudes into actions. Providers and employers may need to do more to incentivise employees to plan for retirement.
Promisingly for firms, consumers show a willingness to engage, with many keen to receive regular updates on their fund and hear about their projected retirement income.

Table of Content

OVERVIEW
What you need to know
Scope of this Report
Trust-based pensions
Contract-based pensions

EXECUTIVE SUMMARY
The market
Insurer-administered trust-based premiums expected to see marginal boost
Figure 1: Forecast of new insurer-administered trust-based pension premiums, 2012-22
New single premiums to drive growth in the group sector
Figure 2: Forecast of new group pension premiums, 2012-22
Workplace pensions are increasingly seen as safest way to save for retirement
Half of private sector employees personally contribute less than 2%
Figure 3: Percentage of salary personally contributed by employees with workplace pensions, by sector, 2016
Companies and brands
Continued consolidation
Scottish Widows to launch master trust
The consumer
Two thirds of employees are enrolled
Figure 4: Workplace pension enrolment, April 2016 and April 2017
High interest in retirement income forecasts
Figure 5: Attitudes towards workplace pensions, April 2017
Over two fifths of pension holders would like regular updates
Figure 6: Interest in workplace pension features, April 2017
Dashboards: the new advice hub?
Figure 7: Interest in workplace pension advice/guidance, April 2017
What we think

ISSUES AND INSIGHTS
Consumers call for a ‘down-to-earth’ pension provider
The facts
The implications
Helping employees to help themselves
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Insurer-administered trust-based premiums expected to see marginal boost
New single premiums to drive growth in the group sector
Auto-enrolment continues to boost workplace pension ownership
Workplace pensions are increasingly seen as safest way to save for retirement
Half a million employers meet staging dates

MARKET SIZE AND FORECAST
Trust-based schemes
Growth stalls in the insurer-administered trust-based sector
Figure 8: New insurer-administered trust-based pension business (volume and value), 2012-16
Premiums expected to see marginal boost
Figure 9: Forecast of new insurer-administered trust-based pension premiums, 2012-22
Figure 10: Forecast of new insurer-administered trust-based pension business, 2017-22
Forecast methodology
Contract-based pensions
Capacity crunch hits contract-based sector
Figure 11: New group pension business (volume and value), 2012-16
New single premiums to drive growth
Figure 12: Forecast of new group pension premiums, 2012-22
Figure 13: Forecast of new group pension business, 2017-22
Forecast methodology

TRENDS IN WORKPLACE PENSION OWNERSHIP
Auto-enrolment continues to boost workplace pension ownership
Figure 14: Proportion of employees with workplace pensions, 1997-2016
Half of private sector employees personally contribute less than 2%
Figure 15: Percentage of salary personally contributed by employees with workplace pensions, by sector, 2016

MARKET DRIVERS
Workplace pensions are increasingly seen as safest way to save for retirement
Figure 16: Financial products that consumers consider the safest way to save for retirement, July 2010-June 2012, July 2012-June 2014 and July 2014-June 2016
Insurer-administered trust-based growth stalls
Figure 17: Number of insurer-administered occupational pension scheme members and group pension policies in force, 2011-15
Over half of employers using master trusts
Figure 18: Pension scheme types and number of auto-enrolled eligible jobholders declared by employers, as at 31 March 2016
Half a million employers meet staging dates
Figure 19: Declarations of compliance, March 2017
Over 800,000 new employers expected to stage in 2017/18
Figure 20: Staging profile – Forecast for the number of small, micro and newborn employers subject to full duties, 2015/16-2017/18

REGULATORY AND LEGISLATIVE CHANGES
Pension Schemes Bill introduced
Snap election leads to omissions from the Finance Bill
LISA launches but receives limited backing
Minimum contributions set to rise
Figure 21: The minimum percentage of qualifying earnings to be paid by employers, employees and the government
Pensions dashboard to boost transparency

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Continued consolidation
Scottish Widows to launch master trust
Getting ethical
Supporting small businesses with auto-enrolment
Above-the-line expenditure exceeds £30 million

PROVIDER RANKINGS AND MARKET SHARE
Continued consolidation in trust-based sector
Figure 22: Rankings of top 20 providers of insurance-administered trust-based occupational pension business, by gross premiums, 2015
Aviva climbs to top spot in insurance-administered contract-based sector
Figure 23: Rankings of top 20 providers of insurance-administered individual and group contract-based pension business, by gross premiums, 2015

COMPETITIVE STRATEGIES
Digital advice and guidance
Scottish Widows to launch master trust
Getting ethical
Figure 24: Coverage of NEST’s climate-aware equity fund on Twitter, February/March 2017
Supporting small businesses with auto-enrolment

ADVERTISING AND MARKETING ACTIVITY
Above-the-line expenditure exceeds £30 million
Figure 25: Total above-the-line, online display and direct mail advertising expenditure on pension products and advice, 2012/13-2016/17
Digital advertising comes to the fore
Figure 26: Distribution of above-the-line, online display and direct mail advertising expenditure on pension products and advice, by media type, April 2016-March 2017
DWP continues to spend the most on ATL advertising
Figure 27: Top 15 above-the-line, online display and direct mail advertisers of pension products and advice, 2015/16-2016/17
Nielsen Ad Intel coverage

THE CONSUMER – WHAT YOU NEED TO KNOW
Workers at small firms being phased in to auto-enrolment
Two thirds of employees are enrolled
One in five employees still confused about pension type
Converting attitudes into action
Over two fifths of pension holders would like regular updates
Dashboards: the new advice hub?

SIZE AND SECTOR OF EMPLOYER
Workers at small firms being phased in to auto-enrolment
Figure 28: Size and sector of employer worked for, April 2017
Small firm workers most ‘at risk’ of opting out

PENSION ENROLMENT
Two thirds of employees are enrolled
Figure 29: Workplace pension enrolment, April 2016 and April 2017
Nearly half of small firm workers already enrolled
Figure 30: Workplace pension enrolment, by sector and size of employer, April 2017

TYPE OF WORKPLACE PENSION
One in five employees still confused about pension type
Better access, better engagement
Figure 31: Type of workplace pension enrolled in, April 2016 and April 2017

ATTITUDES TOWARDS WORKPLACE PENSIONS
High interest in retirement income forecasts
Figure 32: Attitudes towards workplace pensions, April 2017
The unfairer sex
Figure 33: Attitudes towards workplace pensions, by gender, April 2017

INTEREST IN WORKPLACE PENSION FEATURES
Over two fifths of pension holders would like regular updates
Figure 34: Interest in workplace pension features, April 2017
Aggregation appeals
Ethical funds have a place

AWARENESS AND ADVICE
Jargon-free guidance could boost engagement
Figure 35: Interest in workplace pension advice/guidance, April 2017
Dashboards: the new advice hub?
Only 1 in 4 pension holders has a preferred provider
Figure 36: Provider awareness and engagement levels, April 2017

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Market structure and key players
Employer duties
Pension supply and administration
Figure 37: Main participants in the workplace pension market and how they interrelate, 2017
Investment management
The rise of master trusts
Abbreviations
Consumer research methodology

APPENDIX – MARKET SIZE AND FORECAST
Trust-based sector forecast – Best-and worst-case scenarios
Figure 38: Forecast of new insurer-administered trust-based pension premiums – Best- and worst-case scenarios, 2017-22
Contract-based sector forecast – Best-and worst-case scenarios
Figure 39: Forecast of new group pension business – Best- and worst-case scenarios, 2017-22
Forecast methodology

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