Bundled DC assets of lifetime savings providers, principally life insurers, grew 22 per cent in the year to 30 June 2021 to £382bn, according to the fourth edition of Corporate Adviser Intelligence’s Workplace Savings Report.
The report has found that Aviva is the UK’s biggest bundled DC provider with total assets of £87.5bn at the end of H2, 2021, and has grown its book of business by 18 per cent in the year to 30 June 2021. Legal & General is the biggest provider if its unbundled DC assets are included, at £130.8bn.
Scottish Widows is second biggest bundled provider with £76bn of assets.
L&G was the fastest growing of all the £1bn-plus providers, with a 39 per cent increase in its bundled DC assets over the year to 30 June 2021.
Contract-based-only providers Royal London and Hargreaves Lansdown both saw above-sector-average percentage increases in DC assets, suggesting that there is plenty of appetite for GPP and Group Sipp arrangements despite the high profile given to master trusts in recent years.
The report calculates that roughly half of the 22 per cent growth in providers’ DC asset values in the year to June 2021 was down to investment performance.
L&G has the largest number of members invested outside of the default fund, with 56 per cent doing so.
Scottish Widows saw the highest proportion of members consolidating assets by transferring funds from other providers into their pot, with 27 per cent doing so
Hargreaves Lansdown has the highest quoted level of members nominating their death benefit beneficiary, with 26.9 per cent having done so
Only two providers, Hargreaves Lansdown (49.2 per cent) and Cushon (3 per cent), were able to give figures for the percentage of members contributing above the employer match.
The report also found that Hargreaves Lansdown dominates the workplace Isa market, with £748m of assets, and has increased its corporate Isa book by 57 per cent in the year to June 2021.
Cushon is the second-largest workplace Isa provider amongst those that revealed their figures. Its £50m of workplace Isa assets, across the full suite of wrappers, marks a 133 per cent increase on last year’s figure.
Legal & General’s corporate Isa book stands at just £160,000. Other big providers Aegon, Aviva and Fidelity declined to reveal their corporate Isa figures
Only two providers offer Lifetime lsas, despite the attractive benefits they can offer younger savers.
Corporate Adviser editor John Greenwood says: “It’s been another big year for workplace savings providers on the pensions front, although it is important to factor in how much of the asset growth achieved is down to investment performance.
“The picture is markedly different when it comes to providers’ success in engaging staff with Isas through the workplace. Two – Hargreaves Lansdown and Cushon – are doing this very well, but many big providers are barely making any inroads at all, which is surprising given the attractions of Lifetime Isas in particular to younger workers.
“The report also indicates providers’ relative success in engaging members, as evidenced by their success rates in achieving actions such as transfers in, increased contribution and death beneficiary nominations. These are key VFM factors and it is hoped that we will see more transparency around this in future.”
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