Employees have £1 saved in workplace Isas for every £500 saved in defined contribution pensions, with corporate Isa savings now standing at £800m, according to figures from Benefits Expert partner publication Corporate Adviser Intelligence’s Workplace Savings Report.
The report shows Hargreaves Lansdown dominates the workplace Isa market, with £724m of assets, although it suffered a 5.5 per cent fall in assets managed. Aegon is the second largest corporate Isa provider, with £82m of assets, more than three times its 2018 figures. Cushon is third largest, with £60m, up 20 per cent on a year ago. Aon has the highest number of workplace Isa savers.
The report confirms that only three providers, Aon, Hargreaves Lansdown and Cushon, offer Lifetime Isas, although Fidelity has one in development and Standard Life offers one through Cushon. Hargreaves Lansdown has £19.3m in Lifetime Isa savings through direct subscription whilel Cushon has £3m in payroll-deducted Lifetime Isa assets and Aon has £1.2m.
The report shows that the assets of workplace savings providers barely increased for the year to June 30, 2022, with providers showing consecutive years’ data growing their books by an average of 0.16 per cent, compared to 22 per cent growth in the previous 12 months.
Fund performance has had an impact on AUM, with typical defaults down around 5 per cent in the year to 30.6.22, compared to rising around 12 per cent the previous year.
The DC pension assets of providers covered in the report, life insurers and providers offering workplace savings, now stand at over £400bn,
Aviva remains the UK’s biggest bundled DC provider with total assets of £90bn at the end of H2, 2022, and grew its book by an above-sector-average 3.2 per cent. Scottish Widows is second biggest with £76bn of assets, growing by 5.2 per cent.
Contract-based-only provider Royal London saw the biggest percentage growth in market share of £1bn-plus providers, up 44.2 per cent over the period.
The number of inactive pots administered by workplace pension providers grew by 1.1m in the year to June 2022, with deferred member numbers growing at twice the rate – 11.6 per cent – of that of active members.
Only two providers, Hargreaves Lansdown (52 per cent) and Cushon (15 per cent), gave figures for the percentage of members contributing above the employer match.
Corporate Adviser Intelligence head of research John Greenwood says: “We are beginning to see green shoots of growth in the workplace Isa market as employers look to flesh out the savings options open to their staff. But pre-retirement savings remain a low priority for several providers.
“DC assets flat-lined in the year to H2, 2022, with market falls offsetting contribution inflows. Meanwhile the reality of spiralling small pots is beginning to hit home.”