The impact of regulation on the UK retail pensions market

Abstract

This thesis presents a longitudinal study of the regulation of the UK retail pensions market. A framework is developed to analyse regulation and regulatory change and to identify the policies and events which may be hypothesised to affect the operation of the market. A provisional model is devised to show the relationships among regulation, the strategic decision-making of market participants and key dimensions of the market (products, prices, demand, distribution channels, costs and industry structure). The empirical evidence shows that over an extended period of time (from the mid-1980s to 2007) regulation affected product development, product pricing, demand, the evolution of distribution channels, producer costs and margins and ultimately the industry structure. The cumulative effect of and interaction among three separate but related public policies shaped the market that is observed in 2008. Over the period since the mid-1980s, the market has been affected more by regulation than by any economic, social or technological change. An evaluation of public policies towards the market shows that policy objectives have not been met and that policies have led to unforeseen and undesirable outcomes. The provisional model is developed to contribute towards the theory of regulated competition. This thesis makes a methodological contribution by developing techniques to assess and evaluate government intervention in a market over the longer term and to consider the interactions between different but related public policy initiatives. An agenda for further research building on this study is proposed. This thesis also makes a contribution to business history in relation to the UK insurance industry. The change in the structure of the industry over the last twenty years is significant in the light of the long history of the industry and the role it has played in the development of retail financial markets in the UK.