UK At-retirement Market 2007

Content

• Chapter 1 Executive Summary
  • Market Focus
  • Sector Issues
  • Competitor Issues
  • Distribution Dynamics
• Chapter 2 Introduction
  • What is this report about?
  • Who is the target reader?
  • How to use this report
• Chapter 3 Market Focus
  • Introduction
  • Key findings
  • Historic Data
  • Key Products
  • Pension annuities are the leading retirement product
  • Fixed-rate annuities are less flexible
  • Index-linked annuities can be pricey
  • Investment-linked annuities are only a small part of the total market
  • Open annuities offer a lump sum at death
  • The purchased life annuities market is under-developed
  • Value-Protected annuities provide protection of capital
  • Enhanced annuities are a growing market
  • Alternative products
  • Income drawdown is a popular alternative when the annuity market is unfavourable
  • Strengths of income drawdown
  • Weaknesses of income drawdown
  • Alternatively Secured Pensions are a controversial topic
  • Trivial Commutation is unlikely to affect large numbers of people
  • Hybrid annuities offer more flexibility and are likely to develop fast
  • The equity release market has recently seen strong growth
  • Strengths of equity release
  • Weaknesses of equity release
  • Trends and Drivers
  • Life expectancy is the single most pressing issue affecting the UK annuity market
  • Changes in attitude and greater awareness has contributed to an increase in longevity
  • Increased longevity makes annuities more expensive
  • Interest rates have an impact on annuity rates
  • A-Day has had a negative effect on annuity rates
  • Customer attitudes are changing slowly, but education is paramount
  • Regulation
  • ASP is the most controversial issue in the at-retirement market in 2007
  • UCITS III has had a positive impact on the market
  • The European Age Discrimination directive will impact product development
  • A-Day has led to increased sales of alternative products such as income drawdown
  • The majority of providers believe more legislation is necessary
• Chapter 4 Sector Issues
  • Introduction
  • Key findings
  • Key Issues
  • Consumer confidence has been affected by government indecision
  • The U-turn on ASP is likely to have a positive effect on the annuity market
  • The ASP is not the Holy Grail
  • Trivial commutation is unlikely to have a big impact
  • There is an over-reliance on property in retirement portfolios
  • Equity release is becoming increasingly popular
  • 1) Lifetime Mortgages
  • 2) Reversion Schemes
  • Equity release is primarily sold through intermediaries
  • Strategic Issues
  • Life expectancy is changing annuity pricing structures
  • Consumers are moving towards more diversified alternatives
  • Resolution of Issues
  • Flexibility is important to maintain a steady income
  • Providers must place more of a priority on the annuity business
• Chapter 5 Competitor Issues
  • Introduction
  • Market share
  • Recent Product Developments
  • The UK market remains dominated by a number of leading annuity providers
  • Scottish Widows is one of the UK's most recognized brands
  • Legal & General is one of the foremost UK insurance companies
  • Prudential is a leader in the UK retirement market
  • Standard Life is one of the largest UK provider of pensions in the UK
  • Norwich Union sales were boosted by A-Day
  • Friends Provident targets wealthy customers
  • Retirement investment plan
  • New entries into the UK at-retirement market
  • Metlife is one of the USA's largest insurers
  • Just Retirement focuses only on retirement products
  • Living Time attempts to offer more flexible products
  • Aegon Scottish Equitable saw high levels of growth in 2006
  • Hartford is the largest global provider of investment bonds
  • Innovation is growing in the at-retirement market
  • Metlife have introduced a 'unique' new product
  • New entrants are driving growth in the non-convential arena
  • Income Drawdown is still dominated by three major players
  • Prudential, Scottish Widows and Standard Life are the key providers in the income drawdown market
  • Prudential
  • Scottish Widows
  • Standard Life
  • The equity release market is growing
  • The equity release market is no longer dominated by the two giants
  • New entrants are vying for a position in the market
  • Product innovation is growing
  • Distribution is key
• Chapter 6 Distribution Dynamics
  • Introduction
  • Key findings
  • Independent intermediaries account for around 70% of pension annuities business
  • Independents also dominate the income drawdown market
  • Increase in competition due to high margins for annuity business
  • FSA review of distribution may be a catalyst for change
  • But IFAs will play a crucial role in the new retirement era
• Chapter 7 Appendix
  • Definitions
  • Asociation of British Insurers definitions of products
  • Pension annuities
  • Income drawdown
  • Association of British Insurers definitions of distribution channels
  • Independent Financial Advisers (IFAs)
  • Direct sales forces
  • Tied agents
  • Multi-tied agents
  • Bancassurance
  • Direct marketing
  • Telesales
  • Other
  • Other definitions
  • Additional Voluntary Contributions (AVCs)
  • Annuity
  • Defined contribution pension scheme
  • Defined benefits pension scheme
  • Research methodology
  • Future readings
  • Life and Pensions SPP
  • Interactive Databases
  • Reports and Briefs
  • Financial Advice Market SPP
  • SPP writing team
  • How to contact experts in your industry
• List Of Tables
  • Table 1: Pension Annuities in Force, 1995-2006
  • Table 2: Total new premiums, 2002-2006
  • Table 3: The UK Income Drawdown Market 2004-2006
  • Table 4: The UK Annuity Market, 1994-2005
  • Table 3: Annuities with-profits, total business 2005
  • Table 4: Non-profit annuities, total business 2006
  • Table 5: Non-profit impaired life annuities, total business 2006
  • Table 8: Pension annuities sales 2002-06, split by distribution channel
  • Table 9: Income drawdown sales 2002-06, split by distribution channel
• List Of Figures
  • Figure 1: UK At-Retirement 2007: Available Briefs
  • Figure 2: Annuities can be used to provide a level or increasing income
  • Figure 3: Life expectancy in the UK has reached record levels
  • Figure 4: Women are living almost 20 years longer at age 65
  • Figure 5: Income drawdown sales increased significantly in Q2 2006 as the price fell