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 - Industry Investment Chapter
The Pension Funding industry is estimated to have a low level of capital intensity, measured by the capital-to-labour ratio. This ratio is estimated to be 1:22 in 2016-17, meaning that £22.00 is spent on labour for every £1.00 spent on capital. IBISWorld research shows that the level of capital intensity has remained low over the past five years.
The primary focus of capital expenditure in the industry is information and communication technologies. However, the need for skilled investment professionals far outweighs the need for capital. Although the industry has a low level of capital intensity, labour is also a relatively small expense to pension funds because many pension funds outsource the management of their assets to external fund managers... purchase to read more