Strategic report Governance Financial statements Other information MARKET OVERVIEW CAPTURING GROWTH IN AN ATTRACTIVE MARKET CONTINUED Pensions Pensions The impact of the introduction of Pension Demographic pressures have not abated. 1.6m Pension auto-enrolment in the UK has Freedoms in 2015 has been immense and whilst Notwithstanding the progress achieved through revolutionised saving, with over 1.6 million they have proved understandably popular with auto-enrolment, the UK still faces a significant employers and more than 10 million employees investors, regulation continues to evolve to retirement saving challenge. This is likely to be employers participating in pension now participating in the programme. protect investors from the financial risks the exacerbated by the developing financial auto-enrolment in the UK1 The workplace will continue to play a pivotal role freedoms present. The free Pension Wise service challenge presented by the increasing cost of in retirement saving and Hargreaves Lansdown is still not widely used and the FCA is introducing providing social care. There is continued 10m Workplace Solutions, which already provides stronger prompts to encourage people to shop government support for retirement saving and pension, investment and annuity services for around, as well as consulting on investment an increased emphasis on personal responsibility over 500 employers, can really make a difference pathways for non-advised drawdown investors. and engagement. Hargreaves Lansdown is likely employees participating in pension by improving employee engagement with saving Hargreaves Lansdown participated in behavioural to be a beneficiary from this trend as we are a auto-enrolment in the UK1 trials to assess ways to increase the take up of market leader in customer service, simplifying through a range of high quality services. this free guidance. pensions and making it easy for people to save Auto-enrolment has delivered demonstrable Better investor engagement with retirement and invest with confidence. successes. However, Hargreaves Lansdown savings and the decisions people can take to Cash savings continues to lobby for further reform. We’re improve their financial futures is a high priority. Alongside risk-based investments, investors particularly concerned about the retirement Hargreaves Lansdown is committed to being continue to hold cash despite persistent low savings of the self-employed and the ability for at the forefront in helping people meet this interest rates on cash savings. Our research Better investor engagement savers to exert control as to where their pension challenge. We can provide bespoke ongoing shows that there is £1.4 trillion of cash held in the with retirement savings savings are directed. The self-employed are personal advice, but for many this is too UK including c.£650 billion in easy access type and the decisions people currently excluded from auto-enrolment and expensive and not appropriate, so we are looking accounts and the remainder in term deposit generally shun retirement saving yet number at more cost effective solutions which will give accounts. “Active Savings”, our digital deposit can take to improve their over five million. The exibility of the Lifetime ISAfl guidance or advice at the point clients really need service provides a simple digital solution for financial futures is a high coupled with incentives that make it more it and have contributed fully to an FCA call for managing cash savings. Since its launch we have priority for us. attractive for basic rate taxpayers makes it an input on the subject. continued to refine the proposition and during attractive product for this left behind group. the year we launched our initial cash ISA offering. New retirement regulation from the FCA such As at 30 June 2021, we had over 90,000 clients as changes to illustrations, wake up packs and using the service with over £3.1 billion AUA. annuity disclosures have all been adopted into our processes. In addition, by the February 2021 Clients holding risk based investments invariably deadline we implemented simple investment have cash held elsewhere so utilising Active pathways for those in drawdown. Early evidence Savings becomes anatural extension of their from the measures we’ve introduced has shown interaction with us and enables us to become a boost in engagement levels, signs of earlier ever more part of their financial lives. retirement planning and an increase in annuity pay-outs, although uptake of investment 1 Department for Work & Pensions, Automatic enrolment pathways has been very low as anticipated. evaluation report 2019. 22 Hargreaves Lansdown Report and Financial Statements 2021