Aviva has revealed five of the main reasons UK SME businesses are looking to change their auto-enrolment (AE) workplace pension provider.1
A secondary market within AE workplace pensions is developing now that many companies have had their original workplace pension scheme in place for a number of years.
Data has shown that year-on-year,2 enquiries coming into Aviva about switching AE providers are up 80%.
The year AE was introduced and adopted by large businesses.
During 2018, Aviva took around 1,200 calls from businesses who were considering moving their workplace pension scheme to Aviva.
Five of the main reasons businesses said they were considering switching were:
- service levels
- engagement – having a point of contact at their provider
- digital capability
- merger/acquisition – one business joins another and adopts a single workplace pension provider.
Malcolm Goodwin, Head of Workplace Savings & Retirement at Aviva, said:
“SMEs and their advisers are now starting to understand that when it comes to their auto-enrolment provider, they do have the freedom to switch.
“Many businesses are now three years or more into AE and they are starting to look at what is being delivered by the scheme they originally signed up to.
AE minimum contributions are rising again in April. Now is a good time to examine what is in place and ensure it is still suitable.
“SMEs are free to shop around for a workplace pension provider that is best for them. We’ve already seen an 80% increase in enquiries and I expect that to keep rising. It is up to providers to ensure they are offering businesses what they need.”
The secondary market
Businesses looking to change their AE pension provider is known as the ‘secondary market’.
The ‘primary market’ started in 2012 when AE was first introduced and adopted by large businesses.
Over the course of the next six years, businesses of all sizes were given staging dates – the date by which they needed to have a workplace pension on offer to their employees.
That process ended in early 2018 as all existing businesses had been through this process. Now, any new company has up to six weeks from when they take on their first employee to get their workplace pension scheme in place.
Many SMEs have now had their schemes for a number of years, providing them with time to assess if it is delivering what they require. This secondary market is being fuelled by those companies and their advisers who are now looking around to see what else is available.
1Based on c1,200 enquiries to switch a pension scheme into Aviva’s SME workplace pension team during 2018.
212 months to September 2018.
Notes to editors:
- Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers.
- In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
- Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and manages over £346 billion in assets (as at 30 June 2019). Total group assets under management at Aviva group are £501 billion (as at 30 June 2019).
- Aviva helps people save for the future and manage the risks of everyday life; in 2018 we paid £32.9 billion in claims and benefits on behalf of our 33 million customers.
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