The UK Post-Retirement Pensions Market 2019

This report looks into the UK at- and post-retirement pensions market, exploring how it has been affected by an aging population and recent changes to the laws governing pensions. It also looks at consumers’ attitudes and behaviors regarding advice and transfers from defined benefit to defined contribution pensions, among other topics. The report leverages findings from our 2019 UK Life & Pensions Survey.


– Auto-enrollment is boosting workplace pensions, with 2018 annual premium equivalent growing by 22% on 2017. Two thirds of individuals in their 20s have started a pension through auto-enrollment, compared to 30% of those in their 50s.

– 61.1% of retired individuals state their lifestyle is as expected in retirement, while 18.2% state it is better than expected. The majority of these will have retired before the pension freedoms were introduced.

– Financial advisors state that retirement is the number one prompt to seek financial advice, but uptake is varied. For example, 62% of full pensions withdrawals are made with no advice or guidance.

Reasons to buy

– Understand the impact of recent legislation on consumer behaviors in the at- and post-retirement market.

– Explore how consumers are funding their retirement.

– Discover how technology and robo-advice can be used to encourage individuals to save for retirement.

– Learn about consumers’ attitudes towards defined benefit pension transfers.

Companies mentioned


Wealth Wizards



Scalable Capital





Canada Life

Hodge Lifetime


Legal & General

Scottish Widows

Table of Contents

Table of Contents


1.1. The post-retirement pensions market is ever growing and increasingly complex

1.2. Key findings

1.3. Critical success factors


2.1. The size of the at- and post-retirement market is growing, presenting an opportunity for providers and advisors

2.1.1. The UK population continues to increase, with over 65s accounting for a growing proportion

2.1.2. Over half of individuals – particularly those with a high household income – intend to retire before the state retirement age

2.2. The state pension is limited and funding is under increasing pressure

2.2.1. The UK’s state pension is one of the lowest-paying internationally

2.2.2. The Government Actuary’s Department has warned that the National Insurance Fund is likely to run out in 2032 without intervention

2.2.3. Changes to the SPA are mitigating some of the pressure on the fund

2.2.4. SPA changes will not be enough to improve state pension funding

2.2.5. Successful legal challenges to public sector pension reforms also represent a funding challenge for the government

2.3. Private pension pots remain low, but auto-enrollment is helping to improve the situation in the long term

2.3.1. Over half of pension pots among over 55s are £30,000 and below

2.3.2. Pension saving is on the up thanks to auto-enrollment

2.3.3. The benefits of auto-enrollment will largely be felt by young individuals

2.3.4. DB pensions are the most popular type of pension among over 40s

2.3.5. There has been a definite shift towards DC pensions as companies de-risk

2.3.6. CDCs are set to become a new type of occupational pension for the UK

2.4. The impact of the pension freedoms is better understood, and the FCA is introducing regulations to improve retirement outcomes

2.4.1. The 2015 pension freedoms fundamentally changed how consumers can access their pensions

2.4.2. Following its Retirement Outcomes Review, the FCA flagged a number of concerns

2.4.3. The FCA introduced a series of remedies in 2019 to improve retirement outcomes

2.5. Beyond retirement outcomes, DB to DC transfers are dominating the regulatory agenda

2.5.1. The surge in DB to DC transfers is attracting notable regulatory scrutiny

2.5.2. Data collected by the FCA from those with DB transfer advice permission raised misgivings over advisor practices

2.5.3. A key regulatory development has been the FCA’s and The Pensions Regulator’s joint pensions strategy


3.1. Pensions are the bedrock of retirement funding plans

3.1.1. The state pension is the most commonly cited plan for retirement funding, followed by workplace and private pensions

3.1.2. Over 55s typically seek a monthly income of between £1,000 and £1,999 in retirement

3.1.3. On retirement, low-value pensions are most likely to be fully withdrawn while higher-value pots go into drawdown

3.1.4. Full cash withdrawal is now the preferred method of accessing pension pots for the first time

3.1.5. The majority of full cash withdrawals are linked to small pension pots, with funds most commonly spent on everyday expenses

3.1.6. Income drawdown is the preferred retirement income product for large pension pots

3.1.7. The rise of income drawdown has come at the expense of annuities

3.1.8. Annuity sales plunged in the wake of the pension freedoms, but the decline appears to have tapered

3.2. A small proportion of over 55s choose to defer their pensions and benefit from extra growth

3.2.1. 15.2% of over 55s choose to defer taking their pension

3.3. Retired individuals have confidence in their retirement funds

3.3.1. Over 60% of those who are retired state their lifestyle is as expected


4.1. Retirement is a key driver for individuals to seek financial advice, but uptake is mixed

4.1.1. Financial advisors report that retirement is the key prompt for seeking financial advice

4.1.2. Uptake of advice is mixed and varies significantly by method of accessing a pension

4.1.3. Regulation likely plays a role in why those approaching retirement seek or do not seek advice

4.1.4. For over 55s who use a financial advisor, the key considerations are brand, relationship, and price

4.2. Robo-advice presents one option for retirees looking for a low-cost investment option

4.2.1. Robo-advice companies have proliferated in recent years in the broader investment space

4.2.2. There has been less robo activity in the pensions and retirement space, although Wealth Wizards is one example of a player that has specialized

4.3. The government wants to improve engagement with retirement saving

4.3.1. Pensions Dashboard is the flagship project to boost consumer engagement with pensions

4.3.2. Plans are also afoot to create an income drawdown tool


5.1. Abbreviations and acronyms

5.2. Definitions

5.2.1. Annuity

5.2.2. APE

5.2.3. DB pension

5.2.4. DC pension

5.2.5. Income drawdown

5.3. Methodology

5.3.1. GlobalData’s 2019 UK Life & Pensions Survey

5.3.2. GlobalData’s 2018 IFA Survey

5.4. Secondary sources

5.5. Further reading

List of Tables

List of Tables

Table 1: Size of main pension pot split by gender (all ages)

List of Figures

List of Figures

Figure 1: The UK population is aging, with over 65s estimated to make up 30.2% of the adult population by 2050

Figure 2: The over 65 population currently grows by around 200,000 individuals each year, but this will increase to 300,00 over the next decade

Figure 3: While the majority of adults plan to retire at the state retirement age, around a third intend to retire before then

Figure 4: Those with higher household incomes are much more likely to retire early

Figure 5: The National Insurance Fund is projected to run out by 2032

Figure 6: The SPA has increased in recent years, with further rises on the horizon

Figure 7: A concerning proportion of over 55s are unaware of how big their main pension pot is

Figure 8: UK pensions APE grew strongly in 2018 thanks to the increase in auto-enrollment minimum contributions

Figure 9: Auto-enrollment has succeeded in driving pension saving among younger workers

Figure 10: DB pensions are more prevalent among those aged 40 and above

Figure 11: Consumers approaching retirement have many options in terms of drawing income

Figure 12: Aside from the ability to access pension freedoms, advice from family, friends, and advisors is the key driver of DB to DC transfers

Figure 13: Over 55s are predominantly relying on the state pension to fund retirement

Figure 14: Over 55s are typically seeking a monthly income of between £1,000 and £1,999 in retirement

Figure 15: Full cash withdrawal is the preferred method of accessing pension pots for the first time

Figure 16: 64% of full cash withdrawals are accounted for by pots of less than £10,000 in value

Figure 17: Everyday expenses is the most common use of funds withdrawn from a pension

Figure 18: Drawdown policies are the most common way of accessing high-value pensions

Figure 19: Income drawdown new premiums almost tripled over the review period

Figure 20: The dramatic decline in annuity sales has started to level off

Figure 21: 15.2% of over 55s have deferred taking their pension

Figure 22: Those who defer taking a pension predominantly do so to allow the fund to grow in value

Figure 23: The majority of retired individuals state their lifestyle is as expected

Figure 24: Over 55s are largely confident that their pension assets and savings will last a lifetime

Figure 25: Retirement is the number one prompt for clients to seek financial advice

Figure 26: The level of advice sought on withdrawing from a pension pot varies by method of access

Figure 27: Brand and reputation drive choice of financial advisor among over 55s

Figure 28: Wealth Wizards’ Turo platform targets both consumers and advisors

Figure 29: Tech company EValue launched its Pensions Freedom Planner in September 2019


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