Pension Funding in the UK Industry Market Research Report Now Updated by IBISWorld

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The Pension Funding industry is expected to do better over the coming five years through 2018-19, fuelled in the short term by the phased introduction of automatic enrolment and then later, by a more buoyant financial environment that should bolster equities and push up bond yields, in turn, boosting investment returns. For these reasons, industry research firm IBISWorld has updated its report on the Pension Funding industry.

IBISWorld industry market research
Government reforms are transforming the industry

The Pension Funding industry provides replacement income for people that no longer earn an income. The UK pension system comprises a mandatory state component and a private component. However, the Pension Funding industry excludes the state pension system.

The industry has endured challenging conditions over the past five years. According to IBISWorld industry analyst Iyman Uvais, “Since the onset of the financial crisis in 2008 financial markets have remained highly volatile, resulting in fluctuating investment returns”. At the same time, voluntary contributions have fallen. Despite these pressures, industry revenue – calculated as the change in investment income plus contributions – is expected to increase at a compound annual rate of 4.6% over the five years through 2013-14. However, this is primarily due to the base year (2008-09) revenue figure being significantly depressed as a result of the extremely poor conditions prevalent during the year. Therefore, even though the industry is expected to register revenue growth over the past five years, it is still considerably below the levels recorded before 2007-08 in real terms.

In 2013-14, revenue is expected to rise as quantitative activity and other stimulus measures continue to support equity and bond valuations despite reducing returns on fixed-income assets. The introduction of automatic enrolment will increase contributions and support revenue growth. As a result, industry revenue is forecast to increase by 5.3% in 2013-14 to £107.5 billion, while the level of assets under management (AUM) is estimated to reach £2.1 trillion.

The industry is expected to do better over the coming period. Uvais adds, “In the short term, industry growth will be fuelled by the phased introduction of automatic enrolment, which will result in contributions rising significantly”. Later in the period, a more buoyant financial environment is forecast to bolster equities and push up bond yields, boosting investment returns. The government's planned increase to the pension age is also expected to make pension schemes more attractive and further encourage contributions. The number of defined contribution schemes will continue to rise at the expense of defined benefit schemes. IBISWorld projects that industry revenue and assets under management will grow steadily over the five years through 2018-19.

The level of market share concentration in the Pension Funding industry is low, as the top four participants are estimated to account for less than 10% of the industry's total assets under management in 2013-14. The level of concentration has remained low during the past five-year period. The largest pension fund, in term of assets under management is the BT Pension Scheme. Each of the top four funds account for only a small portion of the industry, with each having shares under 2.0% in terms of assets under management.

For more information on the Pension Funding industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

The Pension Funding industry provides retirement benefits for people no longer earning an income. The industry includes both occupational and personal pension schemes. Mandatory state-provided pension payments are excluded.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld

Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit or call (020) 3008 6568.

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Gavin Smith
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