Legal & General has doubled its DC assets under management in less than four years, extending its position as the biggest DC pension provider in the UK, figures from the Corporate Adviser Workplace Savings Report 2019 reveal.
The report shows that L&G’s DC assets, across both contract and trust schemes, stood at £86bn at the end of the June 2019, double the amount of DC assets it was managing in September 2015 (£43.3bn).
Aviva is the second biggest DC provider, with £66bn of assets, followed by Scottish Widows, Aegon and Standard Life. Most providers saw year-on-year asset growth of around 7 per cent.
But GPP-only providers Royal London and Hargreaves Lansdown saw the biggest year-on-year growth in DC assets, up 16.3 and 10.9 per cent respectively, albeit from a lower base. Their growth suggests that not having a master trust is no obstacle to increasing market share.
The report, which covers providers operating broad workplace savings propositions including pension, corporate Isa and payroll lending, shows there was at the end of Q2 2019 over £340bn in DC pensions across eight workplace savings providers – an increase of £31bn from last year.
The report, which includes research amongst 50 corporate advisers, shows charges and the quality of the DC provider’s default are the two most important factors for advisers when choosing schemes. Governance has fallen back as a factor, possibly because master trust authorisation is seen to have levelled the playing field across the sector
By comparison, the corporate Isa sector remains tiny, with £434.5m in assets declared by workplace savings providers in this report, the overwhelming majority of which are managed by Hargreaves Lansdown.
Corporate Isas have been around for over a decade, and while the numbers are tiny relative to DC pensions, for some providers, the uplift in assets since 12 months ago shows the product appears to be finally getting some traction. Hargreaves has £351m in corporate Isa assets, with Aegon having £44m, up 76 per cent on the previous year, Aviva with £25m, fintech provider Smarterly on £9m and Scottish Widows on £5.5m.
Only one payroll lending provider, Neyber, is prepared to disclose its lending figures to the intermediary audience. It has lent £175m to employees.
To request a copy of the report, click HERE.
