This report examines the continuing evolution of occupational pension provision in the UK and the impact of the increasing range of influences on what was, until the last five years, a fairly stable and predictable component of the economic environment. Pensions, and, in particular, occupational pensions, have always been high profile but the twelve months since the last Mintel report on the subject have been unprecedented and pensions have risen higher up the political, economic and social agenda than has been the case at any time in recent history.

This report examines the continuing evolution of occupational pension provision in the UK and the impact of the increasing range of influences on what was, until the last five years, a fairly stable and predictable component of the economic environment. Pensions, and, in particular, occupational pensions, have always been high profile but the twelve months since the last Mintel report on the subject have been unprecedented and pensions have risen higher up the political, economic and social agenda than has been the case at any time in recent history.

Increasing focus is being placed by individuals on their pension arrangements as a result of the growing importance of quite separate factors, all of which have been working to the detriment of the worker who believes that they have made provision for their retirement on which they can rely. The factors include:

· increasing life expectancy

· declining birth rates

· falling interest rates (and declining stock market returns) as a consequence of the decline of inflation

· a review by employers of their occupational pension arrangements since the passing of the Pensions Act in 1995 with its increased governance demands

· the rewriting of the rule book by the state with an overhaul of second pillar pension provision since the Labour Party took control in 1997

· the removal of ACT allowances on dividends received by pension schemes, reportedly costing occupational pension schemes £5 billion per annum since 1997

· the introduction of FRS17 with its requirement that pension schemes report surpluses and, more importantly, short term deficits, as balance sheet items for quoted

companies.

Even the most paternalistic of employers have had reason to review the arrangements for their employees when they retire and, in many cases, their review has lead to the introduction of arrangements that are less generous than those that previously prevailed. Specifically, the last two years have seen the decline in the relative importance of defined benefit pension schemes and an increase in the importance of defined contribution (or money purchase) occupational pension schemes.

This report examines the changes and development of the occupational pensions market. The factors that influence the market are examined in detail and the question is asked whether the current trend away from occupational defined benefit schemes towards either occupational or individual money purchase arrangements has now become irreversible. Exclusive consumer research examines some important current issues relating to the level of planning for retirement income and the role of occupational pensions in that planning.

Other Mintel reports of interest include:

- The Grey Market, Finance Intelligence - UK Report, June 2002

- Premium Pensions, Finance Intelligence - UK Report, May 2002

- Personal Pensions, Finance Intelligence - UK Report, March 2002

- Annuities, Finance Intelligence - UK Report, February 2002

- Alternative Retirement Strategies, Finance Intelligence - UK Report, August 2002.