United Kingdom (UK) Pensions Market Size, Trends, Competitive Landscape and Forecasts, 2022-2026

Pages: 53 Published: October 19, 2022 Report Code: GDFS0404IA

In terms of annual premium equivalent (APE), the United Kingdom (UK) pensions market size was valued at GBP13.9 billion in 2021. The market is expected to achieve a CAGR of more than 1% during 2021-2026. The growth will be slow across all years of the forecast period. Ongoing economic issues are expected to impact the unemployment rate as well as the amount individuals contribute to their pensions.

The United Kingdom (UK) market research report explores how consumers’ attitudes and behaviors towards long-term saving, planning for retirement, and accessing private pensions are changing because of the COVID-19 pandemic and economic uncertainty. The report also provides current and historical data on the size of the market by product type, covering individual pensions, workplace pensions, and trust-based pensions. Moreover, data on common retirement products (annuities and income drawdowns) is provided.

United Kingdom (UK) Pensions Market Size

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The UK Pensions Market Dynamics

Pensions will be more easily accessible because of the development of dashboards. It will become more visible, allowing people to monitor their pension balances thereby reducing the number of lost pensions. This will make it easier for individuals to plan for retirement as well as for promoting client engagement.

Since the state pension is not enough to support a reasonable lifestyle in retirement, providers will need to keep raising awareness of the need to save for retirement. In addition, the cost-of-living crisis could lead some individuals to stop making contributions toward their pensions.

The UK Pensions Market Segmentation by Type

The key pension types in the UK pensions market include trust-based pensions, work-based pensions, master trusts, and individual pensions. In 2021, the overall growth of the UK’s pension market is largely driven by work-based pensions. The increase in the number of employees across the UK making contributions to workplace pensions drove growth for this type of pension. However, due to the government’s COVID-19 furlough scheme, some of the growth in workplace pensions was limited, as contributions made were calculated on a reduced wage.

The UK Pensions Market Analysis by Types

The UK Pensions Market Analysis by Types

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Competitive Landscape

Some of the leading providers in the UK pensions market are BlackRock, Aviva, Royal London Mutual, Lloyds Banking Group, Phoenix Group, M&G, Fidelity International, Liverpool Victoria Financial Services, Zurich Financial Services, and NFU Mutual. BlackRock was the largest provider of individual and workplace pensions in 2020 and was followed by Aviva.

The UK Pensions Market Report Overview

Market Size (2021) GBP13.9 billion
CAGR (2021-2026) >1%
Pension Types Trust-Based Pensions, Work-Based Pensions, Master Trusts, and Individual Pensions
Leading Providers BlackRock, Aviva, Royal London Mutual, Lloyds Banking Group, Phoenix Group, M&G, Fidelity International, Liverpool Victoria Financial Services, Zurich Financial Services, and NFU Mutual

Reasons to Buy

  • Examine the size of the pensions market
  • Discover how individuals save toward retirement
  • Learn how individuals access their private pensions for the first time
  • Understand trends in the income drawdown and annuities segments
  • Explore the gender gap in pensions
  • Understand the impact of the cost-of-living crisis on the market, sentiment, and customer behavior

Key Players

Aviva
Lloyds Banking Group
Prudential
Phoenix Group
Zurich Financial Services
BlackRock
M&G
Liverpool Victoria Financial Services
NFU Mutual
British Airways
Fidelity
LV=
Rothesay Life
Royal London Mutual
Pension Insurance Corporation (PIC)
Just Group
Canada Life
MEDGULF
Outokumpu
Threadneedle
Tumelo
Standard Life
Legal & General
Hodge Lifetime
Just
Scottish Widows Master Trust
Uber

Table of Contents

Table of Contents

1. Executive Summary

1.1 Market overview

1.2 Key findings

1.3 Critical success factors

2. The State Pension and Retirement Planning

2.1 Upon reaching the SPA, the majority of individuals retire

2.2 The state pension is not enough to support a comfortable lifestyle

2.3 The rising cost of living is impacting retirement income for both non-retirees and retirees

3. Private Pensions: Market Size and Players

3.1 Savings into pensions bounced back following a fall in 2020

3.2 BlackRock and Rothesay Life lead the pensions market

3.3 Other market developments

4. Saving for Retirement

4.1 Due to AE, more individuals are contributing to their workplace pensions

4.2 Pension pot characteristics and saving attitudes

5. Pension Decumulation

5.1 Many people over 55 making pension withdrawals are endangering their long-term savings

5.2 Accessing pensions for the first time

5.3 Income drawdowns and annuities

6. Lifestyle in Retirement

6.1 Retirees have confidence in their retirement funds

7. Appendix

7.1 Abbreviations and acronyms

7.2 Definitions

7.3 Methodology

7.4 Secondary sources

7.5 Further reading

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List of Tables

List of Tables

Table 1: Trust-based APE by product type (GBP million), 2017-21

Table 2: Individual APE by product type (GBP million), 2017-21

Table 3: New total premiums APE by advice type (GBP million), 2017-21

Table 4: Top 10 UK individual and workplace pension providers by GWP, 2020

Table 5: Top 10 UK trust-based pension providers by GWP, 2020

Table 6: AE thresholds, 2020-21 to 2022-23

Table 7: Total minimum contributions rose to 8% of qualifying earnings in April 2019

Table 8: Example of average retirement income through annuities, May 2019 to May 2021

List of Figures

List of Figures

Figure 1: The SPA will rise to 68 by 2039

Figure 2: Most individuals retire at around the SPA

Figure 3: The state pension pay of women is lower than for men

Figure 4: An increase to qualifying years makes non-retirees less confident they will receive the full state pension

Figure 5: Adults who are not yet retired value the state pension less than those who are retired

Figure 6: Most individuals desire a retirement income of between GBP1,000 and GBP1,999 per month

Figure 7: Men want a higher monthly income in retirement than women

Figure 8: Single individuals need at least GBP10,900 per annum in retirement to cover expenses

Figure 9: Due to their longer life expectancies, women require larger pension pots than men do in order to have the same income in retirement

Figure 10: Non-retired individuals are more concerned about their retirement income covering their cost of living

Figure 11: 30-39-year-olds are most likely to say their retirement income cannot cover their living expenses

Figure 12: APE for all pension types except trust-based pensions grew in 2021

Figure 13: Almost a third of self-employed individuals think their employment status will adversely impact their retirement income

Figure 14: The independent advice channel dominates in terms of pension distribution

Figure 15: The pensions market is forecast to grow to 2026f

Figure 16: Growth in workplace pension participation grew once more in 2021

Figure 17: The majority of younger adults have started a workplace pension due to AE

Figure 18: Involvement in workplace pensions is incredibly low among individuals aged 16 to 21

Figure 19: A third of individuals would never opt out of their workplace pension, regardless of the contribution rate

Figure 20: There has been a shift away from DB towards DC schemes

Figure 21: Many adults consolidate their pension pots once they reach the SPA

Figure 22: 56.8% of individuals contribute at least 6% of their income to pensions

Figure 23: 98.7% of full-time employees make contributions towards a pension

Figure 24: The largest proportion of employers match the contribution of their employees

Figure 25: Few individuals actively choose the investments in their pension plan

Figure 26: Over the course of their working lives, many lose sight of how much their pension is worth

Figure 27: A sizable proportion of individuals 55 and above have pension funds worth over GBP100,000

Figure 28: The pension pots of women approaching the SPA are smaller than those of men

Figure 29: Over 55s have flexibility in terms of drawing pension income

Figure 30: The largest proportion of over 55s withdrawing from pensions use the funds for everyday expenses

Figure 31: Most people delay claiming a pension in order to continue working longer

Figure 32: When a pension plan is accessed for the first time, more than half are completely withdrawn

Figure 33: Small pension pots are typically completely withdrawn when initially accessed

Figure 34: Income drawdowns and annuity sales have recovered following the pandemic

Figure 35: The value of taxable flexible payments from pensions increased in 2021

Figure 36: More than 90% of people claim that their lifestyle after retirement is better than or as expected

Figure 37: Most retirees are convinced their pensions and savings will sustain them for the rest of their lives

Figure 38: Just under half of retirees review their budgets once a month

Frequently Asked Questions

The UK pensions market size was valued at GBP13.9 billion in 2021.

The UK pensions market is expected to achieve a CAGR of more than 1% during 2021-2026.

The key pension types in the UK pensions market include trust-based pensions, work-based pensions, master trusts, and individual pensions.

Some of the leading providers in the UK pensions market are BlackRock, Aviva, Royal London Mutual, Lloyds Banking Group, Phoenix Group, M&G, Fidelity International, Liverpool Victoria Financial Services, Zurich Financial Services, and NFU Mutual.

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