Abstract
With a rapidly ageing UK population that is spending increasingly more time in retirement, due to improvements in longevity, it can be argued that planning for retirement has never been more important. This is especially true if one considers the fact that company support for workplace pensions schemes has declined significantly since the start of the decade. With many firms closing or scaling down pension schemes there has been a significant shift in responsibility from the employer to the individual when it comes to ensuring a comfortable retirement.
As more of the onus has now shifted on to the individual new opportunities have been created for other areas of the retirement planning industry, such as the personal pension market as well as some non-pension alternatives such as buy-to-let property and equity release. At the moment, however, each of these markets is likely to be experiencing challenging conditions. Just as retirement saving has become more important high levels of personal debt, and more recently a slowing economy and rising inflation, has made it more difficult for consumers to put money aside.
This report presents an overview of the latest developments in the wider retirement planning industry, ranging from traditional occupational pensions, to personal pensions and alternatives such as buy-to-let property. In addition to an exploration of demographic and economic trends and legislative issues, the report also analyses market strengths and weakness and highlights potential market threats and opportunities. The final sections of the report provide insight into consumer trends in retirement planning related to product ownership as well as attitudes and behaviour towards long-term saving and retirement.
Key report issues:
- A rapidly ageing population, which will be spending more time in retirement, is putting more pressure on retiree finances making retirement savings more vital than ever before.
- Due to a high consumer debt and more recently rising inflation, people are finding it more difficult to save for retirement.
- A large proportion of the population have an apathetic attitude towards long-term savings and investment.
- The government has launched a number of initiatives in order to encourage greater participation in long-term retirement savings and investment.
- The launch of Personal Accounts in 2012 present a variety opportunities and threats for retirement planning product providers.
- Homeowners with deficient retirement provision are likely to be increasingly reliant on the wealth built up in their homes to fund their retirement.
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
|
相關報告
|
