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Industry Overview

What is the pensions industry?

A pension is a contract which will ensure a financially secure future for retirement with regular payments from money accumulated via a pension fund. Throughout employment the majority of people will make regular payments into a pension fund (a fund in which assets are grouped, or ‘pooled’ together). When they retire, they can access this money to support them in life-after-salary.

There are different types of pension options available – the most common being an employment based pension or an individual pension. An employment based pension is also referred to as a superannuation (fancy…), a company pension plan or workplace pension and usually forms part of a company benefits scheme. It’s a stakeholder pension, which means that usually both the employer and employee will make regular contributions into a fund which will eventually support the employee in their retirement.

By law, companies will have to provide all of their employees (who match a certain criteria of factors such as pay scales and age) with a workplace pension scheme over the next few years. Individual pensions are also common in the UK, which people set up for themselves through agreements with pension or insurance companies. You will also contribute to the State Pension yourself throughout your working life via your National Insurance payments

There are many career opportunities in this industry. You could work in the public sector for a public sector pensions provider, for pension consultancies or pension companies. There are roles that focus on growing pension funds and working out the most lucrative investment opportunities, risk management, client liaison, regulatory compliance, market research and administration.

Pensions administrators are the guys who ensure payments are made on time and correctly, and that contributions to a fund are processed correctly. They may well also answer queries from contributors, trustees and employers.

There are also actuarial roles up for grabs here. Actuaries and who specialise in pensions will use their statistical and analytical skills to produce calculations for valuations for different schemes and address various aspects of risk management for pension scheme funds. It’s possible to begin in a junior/graduate role here and work up to more senior pensions actuary roles. Pension consultants may well also be at least partially qualified as actuaries, and can provide further advisory services to trustees (representatives of a pension scheme’s members) or pension managers.

Client facing roles in pensions will involve liaison with other professionals such as trustees and HR representatives of clients (if working for a pensions company). Pensions managers and directors have plenty to do with their clients. As head of a pension scheme fund, they will work with them (clients are usually companies) to devise and adapt pension scheme policies and strategies that fit with their business plans. They oversee the schemes’ administration and keep track of the fund’s performance, providing regular feedback to the necessary parties.

Pensions professionals may specialise in different types of pension schemes, such as a defined benefits (DB) plan (a scheme which provides a specific monthly amount following retirement that is based on factors like how long they worked for the employer and age).

The Pensions Regulator represents the legislation that governs the pensions industry and oversees pensions practice in the UK to ensure standards are met and maintained. Some administrative and management roles in pensions will involve duties to ensure these standards are maintained in the running of their firm’s pension schemes.

There are professional qualifications in pension schemes to be gained here, such as PMI qualification with the Pensions Management Institute. In order to progress up the ladder (and pay scale!) you may well need to back a professional qualification like this further down the line in this industry.

And the money? Well, senior roles in pensions, particularly in actuarial or consulting positions can offer salaries can be well in excess of £50,000!

Why are pensions important?

A pension is essentially a form of financial risk management for your future. Money wise, your focus right now is probably focused on the issue of tuition fees and getting on the pay scale for the first time, rather than what you’re going to do when you’ve retired! But you’ll be surprised how quickly the time will come when you have to start planning ahead that far. Many graduate schemes with finance firms will include a pension scheme as part of the benefits package to help you start saving as soon as you start earning. A work place pension scheme, the State Pension and even private pension schemes later on will allow you to accumulate sufficient funds to ensure you have a financially secure retirement when you do leave the rat race.  

Governmental policy changes mean that more and more people may turn to pensions companies in the future to make their pensions arrangements; UK residents are being discouraged from reliance on the State Pension alone. This means that there is plenty of potential for growth for pensions companies – and the careers they provide!

Areas of the pensions industry…

Pensions Administration This is all about carrying out pension scheme processes to help the scheme run smoothly, for example in handling payments and contributions, and dealing with complaints.

Pensions AdvisoryAdvisory roles in the pensions industry involve work with either a company that provides a workplace pension scheme or an individual seeking to take out a pension agreement. It could take the form of consultancy, providing advice on how to improve the way a pension scheme is run, or supporting individuals in their pension options in a role that has close links with wealth management.

Pension Scheme Management Pension scheme managers and directors develop strategies for how funds in a scheme are handled, which can cross paths with asset management.  

Explore more...

Pension Scheme Management

Making the most of contributions into a pensions fund!

Pensions Administration

The day-to-day running of pensions schemes

Pensions Advisory

Helping clients to find the right pension scheme!

Pensions Stereotype Breaker
Smash 'em up

Pensions Jargon Buster
Crack 'em

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