UK Pension Market Report 2020: Best & Worst Case Scenarios Amid the COVID-19 Pandemic - ResearchAndMarkets.com

DUBLIN--()--The "UK Pension Market Report 2020" report has been added to ResearchAndMarkets.com's offering.

A 240 Billion Pound Market, but COVID-19 the Big Unknown

The main purpose of this report is to review the UK pension savings (or accumulation) market, i.e. how consumers are saving for their retirement. A particular focus of this report is how the pension accumulation market has changed under the impact of a series of economic, health and legislative changes which are radically reshaping the types of pensions consumers have and how they are managing their pensions.

In 2019, UK pension funds received total contributions of 241 billion, representing a 10% rise over the level of 2018. In 2019, contributions to workplace pensions represented 70% of total contributions and this is expected to rise to 71% in 2020. In 2019, the publisher estimates that 2.4 million new pension products were sold to members of the public.

In 2019, just over 21 million employees in the UK had a workplace pension with most of these enrolled in an occupational scheme. The main growth in the workplace market started when AE came into force. Between 2012 and 2019, the number of employees with workplace pensions rose by 82.5%.

Despite the size of the market, the impact of COVID-19 on the UK pension market could be severe.

Its economic effects are intensifying funding pressures for DB occupational pensions and potentially cutting contributions to all pensions. However, currently, most pension funds seem to be coping well but this could change depending on the course and duration of the COVID-19 crisis.

Under a best-case scenario, the downturn/recession in the UK and global economies due to COVID-19 will be V-shaped, meaning stock markets and business should recover swiftly and the damage to pension fund finances could be repaired relatively quickly. In the worst-case scenario, the recession is L shaped which could leave pension funds under severe pressure for many years, with some schemes unable to pay out pensions to all retirees.

Economic pressures caused by COVID-19 are also opening some pension holders to scammers and fraudsters. In response, the Pension Regulator and Financial Conduct Authority have taken steps to protect funds and pension holders by, for example, halting pension transfers.

Key Topics Covered

Executive Summary

  • A complex market structure
  • Key market developments
  • Most pension products are acquired without advice
  • A large growing market
  • The Future

Introduction

  • Broad Definitions
  • Workplace Pensions
  • Private schemes
  • Lump-sum (single) or regular premiums

Market Structure

  • Three-Tiered Market
  • Multiple routes to market and multiple market players
  • Personal Pensions
  • Occupational Pensions
  • Number of companies
  • Almost 37,000 sector occupational schemes

Market Developments and Drivers

  • COVID-19
  • Consumers need to save more and for longer
  • Auto-enrolment boosts early pension uptake
  • AE boosts defined contribution pension coverage
  • AE also helps consolidation in the DC sector
  • As DB coverage declines
  • Over one-quarter of people have no pension provision
  • And many are not confident that they are saving enough
  • So, pension holders adopt the portfolio approach to retirement
  • Because, many adults don't have very large pension pots
  • Persistent concerns over pension transfers
  • Pension allowances and limits
  • Investment funds used for pensions told to consider if they are good value
  • The Pension Scheme Bill
  • The Pensions Regulator consults on revising its code of practice for DB funding.
  • Occupational Pensions Schemes (Master Trust) Regulations 2018
  • The FCA turns its attention to private pensions
  • Brexit

Pension Distribution

  • Overview of the distribution process
  • Most personal pensions are sold indirectly without advice
  • Most occupational schemes are sold direct without advice

The Key Players

  • Scheme asset managers: a consolidating market
  • Largest pension fund operators

Market Size and Trends

  • Over 21 million have a workplace pension
  • Around 5 million members in private pensions
  • Over 2 million pension products sold each year
  • Pension premiums contributions exceed 240 billion
  • Private personal and occupational DC the main growth areas
  • Most pension contributions are lumpy
  • Risk transfer market powers ahead

The Future

  • The Big Unknowns
  • Collective defined contribution (CDC) set to come to the market

Companies Mentioned

  • Aberdeen Standard Investments
  • AON
  • Aviva Investors
  • Baillie Gifford & Co
  • Black Rock
  • CBRE Global Investors
  • Columbia Threadneedle Investments
  • Global Advisors
  • Hermes Investment Management
  • Insight Investment
  • Invesco
  • JP Morgan Asset Management
  • LaSalle Investment management
  • M&G Investments
  • Newton Investment Management
  • Royal London Asset Management
  • Russell Investments
  • Schroders Investment Management
  • State Street
  • Wellington Management Co

For more information about this report visit https://www.researchandmarkets.com/r/45381i

Contacts

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Contacts

ResearchAndMarkets.com
Laura Wood, Senior Press Manager
press@researchandmarkets.com

For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900