Polarisation in the pensions market in the wake of the introduction of the stakeholder regime is dri...
Polarisation in the pensions market in the wake of the introduction of the stakeholder regime is driving the growth of Sipps, according to research for PPML.
One in four financial services organisations believe that the main trend in the personal pensions market is the increasing popularity of Sipps. Those responding to the survey of current and potential Sipp providers said stakeholder's introduction and gradual replacement of the traditional personal pension is creating a polarisation between stakeholder at the lower-premium end of the market and Sipps at the higher-premium end.
The research found that 86% of asset managers and 33% of online brokers believe this trend will drive the growth of Sipps, as customers will demand more flexible pension investment options. Asset managers also believe increasing numbers of high-net-worth individuals will drive growth in the Sipp market.
Earlier this year, PPML predicted strong growth in the Sipp market, forecasting half a million Sipp plans by 2010. Those polled in the PPML research tended to forecast annual growth rates of 15%-20% for the Sipp market.
The majority of organisations polled already offer, or plan to launch, a Sipp. Some 51% already market Sipps while 13% plan to offer them in the near future. John Moret, managing director of PPML, said: 'This research has reinforced my belief that Sipps are a growth market and will continue to be for many years.
'More than 50% of those surveyed offer a Sipp and a significant number are currently looking to launch one. A Sipp is no longer a niche product, it has moved into mainstream pensions provision. The flexibility and investment options are unrivalled by any other pension product.'
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