Industry Analysis & Industry Trends
The industry only includes private pensions and excludes state pensions. Industry revenue, which is calculated by combining contributions and investment returns, increased over the past five years. The increase in contributions was fuelled by the phased introduction of automatic enrolment in pension schemes, which began in October 2012. Unemployment levels also fell, which supported the industry because contributions to occupational pension schemes tend to rise when more people are in work. Nevertheless, the Retail Distribution Review, which came into effect in 2013, is expected to have constrained the increase in contributions. Investment income grew over the period, despite some volatility, aided by significant quantitative easing activity... purchase to read more
Industry Report - Starting a New Business Chapter
The Pension Funding industry has moderate barriers to entry. Barriers are higher for occupational schemes, which require employees to make contributions.
Larger funds enjoy substantial economies of scale with regards to investment options and fund expenses. These funds have the capacity to invest in asset classes such as commercial property and alternative investments, which may be beyond the reach of smaller funds. Larger pension funds also have lower average costs per member because fixed costs can be distributed more evenly, unlike smaller funds that cannot spread the burden of managing a pension fund as successfully as a larger fund.
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