In 2019, UK pension funds received total contributions of £241 billion, representing a 10% rise over the level of 2018. In 2019, contributions to workplace pensions represented 70% of total contributions and this is expected to rise to 71% in 2020. In 2019, IRN Research estimate that 2.4 million new pension products were sold to members of the public.
In 2019, just over 21 million employees in the UK had a workplace pension with most of these enrolled in an occupational scheme. The main growth in the workplace market started when AE came into force. Between 2012 and 2019, the number of employees with workplace pensions rose by 82.5%.
Despite the size of the market, the impact of COVID-19 on the UK pension market could be severe. Its economic effects are intensifying funding pressures for DB occupational pensions and potentially cutting contributions to all pensions. Currently most pension funds seem to be coping well but this could change depending on the course and duration of the COVID-19 crisis. Under a best-case scenario, the downturn/recession in the UK and global economies due to COVID-19 will be V shaped, meaning stock markets and business should recover swiftly and the damage to pension fund finances could be repaired relatively quickly. In the worst-case scenario, the recession is L shaped which could leave pension funds under severe pressure for many years, with some schemes unable to pay out pensions to all retirees