Table of Contents
Issues in the Market
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- Key issues
- Market context and definitions
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- Figure 1: Types of private pension provision, UK
- Abbreviations
Future Opportunities
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- Trend: Growth in DIY investing
- Trend: Towards total transparency
Market in Brief
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- SIPP market size
- Transfer activity
- Future prospects
- Market drivers
- Rival sectors and products
- Regulatory developments
- Recent market innovation
- Competitive context and key players
- Distribution trends
- Adspend on pension products
- The key findings of Mintel’s consumer research: asset ownership
- Typical characteristics of the SIPP investor
- Sources of investment advice
- Product awareness and future consideration
Internal Market Environment
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- Key points
- The main factors influencing the market
- New government, new regulatory framework
- The RDR will have a positive impact on the SIPP market
- Platforms – proposed ban on fund manager payments has been removed
- CGT increase
- Cuts in pensions tax relief will have limited impact on the SIPP market
- Removing the requirement to annuitise by age 75 is welcome news
- Issues affecting the wider pension industry
Broader Market Environment
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- Key points
- Social trends
- Increasing longevity has several implications for the pensions industry
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- Figure 2: Life expectancy at age 50 and 65, by gender, 1981-2058 (actual and projected)
- Number of higher-rate taxpayers estimated to have risen in 2010/11
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- Figure 3: Total number of taxpayers and number on higher rate, 1990/91-2009/10
- The SIPP market could more than double in size within the next decade
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- Figure 4: Size of the UK adult population, segmented by value of investible assets held, August/September 2010
- Macroeconomic and investment conditions
- Spending cuts and tax rises will put households under greater pressure
- What impact are these factors having on the SIPP sector?
- Low base rate and high inflation is not a good mix for savers
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- Figure 5: Average annual changes in the Bank of England base rate, CPI and RPI – UK, 2001-10
- Stock market faces renewed provocation…
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- Figure 6: FTSE 100 and FTSE All Share – daily index movements, November 2001-November 2010
- …from the Irish bailout and renewed worries over sovereign debt levels
Competitive Context
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- Key points
- Growth in SIPP sales outpacing the broader market
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- Figure 7: Number of new individual pension contracts, by product type, 2005-09
- SIPPs are now the largest segment within the single-premium market
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- Figure 8: Value of new individual pension business, by product type, 2005-09
- Very limited competition from SSASs
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- Figure 9: Value of new EPP and SSAS business, 2005-09
Market SWOT Analysis
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- Figure 10: UK SIPP market – SWOT analysis, 2010
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Who’s Innovating?
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- Key points
- SIPP Milestones
- Recent product development
Trade Perspective
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- About the participating companies
- SIPPs are a potentially ‘mainstream’ but not ‘mass-market’ product
- New products are being developed to cater for specific new audiences
- New pension legislation will have positive ramifications for SIPPs
- Product diversity naturally leads to varying charging structures and terminology
- There is some scepticism over whether the RDR will truly remove ‘conflicts of interest’
- SIPP providers are positive about the market’s outlook
- The market needs to be clearly defined and uniformly regulated
Market Size and Forecast
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- Key points
- A swiftly expanding market
- Value of new SIPP business increases by 25% in 2010
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- Figure 11: Volume and value of new SIPP business, 2006-10
- Mintel expects strong growth in new business to continue
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- Figure 12: Forecast of the number of new SIPP sales – fan chart, 2006-15
- Figure 13: Forecast of the value of new SIPP premiums – fan chart, 2006-15
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- Figure 14: Forecast of new SIPP business, at current and constant prices, 2006-15
- Forecast methodology
- Fan chart explanation
Market Segmentation
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- Key points
- 2010 sees strong demand for both non-insured and insured SIPPs
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- Figure 15: Value and volume of new SIPP business, segmented, by insured and non-insured business, 2008-10
- Average premiums are much higher in the non-insured sector
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- Figure 16: Average new premium, segmented, by insured and non-insured business, 2008-10
- The non-insured sector has a much higher transfer rate
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- Figure 17: Value of SIPP transfers and share of total single premiums, 2008-10
Market Share
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- Key points
- A market ripe for consolidation
- Most providers run SIPP administration in-house
- Standard Life is the largest provider of SIPPs by value of business in force
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- Figure 18: Largest 12 SIPP providers, by value of in-force business, 2010 (mid-year)
- Significant others
Companies and Products
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- Standard Life
- Company description
- Position in the market
- Product range
- Distribution
- Key data
- Recent activity
- Future plans
- Marketing and promotion
- James Hay, IPS Partnership and IFG
- Company description
- Position in the market
- Product range
- Distribution
- Key data
- Recent activity
- Future plans
- AEGON
- Company description
- Position in the market
- Product range
- Distribution
- Key data
- Recent activity
- Future plans
- Marketing and promotion
- A J Bell
- Company description
- Position in the market
- Product range
- Distribution
- Key data
- Recent activity
- Marketing and promotion
- Hargreaves Lansdown
- Company description
- Position in the market
- Product range
- Distribution
- Key data
- Recent activity
- Future plans
- Suffolk Life
- Company description
- Position in the market
- Product range
- Distribution
- Key data
- Recent activity
Brand Communication and Promotion
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- Key points
- Pension providers and advisers increase their adspend
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- Figure 19: Total advertising expenditure on pensions and retirement income solutions, by sub-category, 2006-10
- Aviva and Scottish Widows use TV advertising to enhance their brand presence
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- Figure 20: Top ten advertisers of pensions and retirement income solutions, 2008-10
- Press and TV account for the largest share of pensions adspend
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- Figure 21: Proportional distribution of adspend on pensions and retirement income solutions, by media type, 2008-10
Channels to Market
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- Key points
- IFAs generate the largest share of SIPP business
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- Figure 22: New regular-premium SIPPs, by sales channel, 2008-10
- Figure 23: New single-premium SIPPs, by sales channel, 2008-10
- Platform progress
Value of Consumers’ Investible Assets
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- Key points
- Survey background
- One in five UK adults aged 21+ have investible assets of £30,000 or over
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- Figure 24: Value of investible assets, 2009 and 2010
- Wealth increases with age until retirement
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- Figure 25: Value of investible assets, by age group, August/September 2010
- Good scope to grow the female SIPP investor market
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- Figure 26: Value of investible assets, by gender and socio-economic group, August/September 2010
- Higher earners have greater assets to invest
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- Figure 27: Value of investible assets, by gross annual household income, August/September 2010
Ownership of SIPPs and Other Assets
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- Key points
- SIPPs are held by 1% of the adult population
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- Figure 28: Ownership of pensions and other assets, by value of assets, August/September 2010
- Investor types
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- Figure 29: Investor types, by value of assets, August/September 2010
- 45-64-year-olds are most likely to have a SIPP
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- Figure 30: Ownership of pensions and other assets, by age, August/September 2010
- Typical characteristics of the SIPP investor
- Men are twice as likely as women to have a SIPP
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- Figure 31: Ownership of pensions and other assets, by gender and socio-economic group, August/September 2010
- Investment portfolios become more diverse with income
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- Figure 32: Ownership of pensions and other assets, by gross annual household income, August/September 2010
Sources of Advice Among the Affluent
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- Key points
- Shift away from professional advice sources may indicate a rising trend towards DIY investment
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- Figure 33: Investment advice sources used, 2009 and 2010
- High street bank is the top source for investment advice
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- Figure 34: Investment advice sources used, by value of assets, August/September 2010
The Consumer – Attitudes towards SIPPs
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- Key points
- Nearly half of the target audience are aware of SIPPs
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- Figure 35: Agreement with statements relating to SIPPs, 2009 and 2010
- Awareness and interest is higher among personal pension savers
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- Figure 36: Agreement with statements relating to SIPPs, by ownership of personal pensions and other assets, August/September 2010
- Room to improve awareness among female and younger investors
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- Figure 37: Agreement with statements relating to SIPPs, by gender and age group, August/September 2010
- New SIPP business will overwhelmingly come from wealthy ABs
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- Figure 38: Agreement with statements relating to SIPPs, by socio-economic group and gross annual household income, August/September 2010
Appendix – Pension Ownership
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- Figure 39: Pension ownership, by demographics, August/September 2010
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