Isio says that the driver of DC membership is still deferred, not active members, in response to the release of the ONS survey on UK occupational pension schemes (Q4) today.
Isio head of research and development Iain McLellan says: “This update from the ONS on UK-funded occupational schemes shows an increase in overall DC membership by just over 1 million members over the quarter to 31 December 2021. This increase brings total DC membership number to 26.7 million.
“However, if you dig a bit deeper in the numbers, you can see that the driver of this 4 per cent quarterly increase has predominantly been an increase in deferred members rather than active members, with respective increases of 6 per cent and 2 per cent. These figures highlight both the success of auto-enrolment in increasing membership, but the rising problem of small DC pots and the consolidation ‘nettle’ that the government and industry is going to have to grasp.
“For the first time the data also includes a breakdown of the countries where overseas assets are invested. The data is helpful, if unsurprising, with the vast majority of overseas investments being made in US assets.
“At 31 December 2021 about 0.3 per cent of directly invested overseas equities and long-term debt was invested in Russia. Over the previous year the trends had been diverging with a 40 per cent reduction in long-term debt exposure and a 20 per cent increase in equity holdings. It will be interesting to see whether future quarterly updates show pensions schemes supporting the general trends of corporate disinvestment from Russia following the invasion of Ukraine.”
