Watson Wyatt’s projections come from a study sponsored by nine financial services companies active in the retirement planning and at retirement markets. The firm’s calculations are based in part on data from the FSA for current market sizing and the Association of British Insurers for new business trends. It combined this with data on age, sex and accumulated fund distribution from the nine sponsors plus its own information on occupational defined contribution pensions.
“The rapid growth in this market provides considerable opportunities for product providers and financial advisers alike,” says Mark Joannes, a senior consultant at Watson Wyatt.
“The phenomenal growth we can expect in the ‘at retirement’ market in the next few years is in part a consequence of the personal pensions sales boom back in the late 1980s and early 1990s. Many people who took out personal pensions back then are now coming up to retirement age. With the prospect of a long-retirement ahead of them, many will be looking for ways to maximise retirement income while minimising capital erosion.”