Skip to content

Statistical bulletin: MQ5: Investment by Insurance Companies, Pension Funds and Trusts, Q2 2012 This product is designated as National Statistics

Key points

  • Total net investment in financial assets is estimated to have been £21 billion in the second quarter of 2012, approximately £17 billion lower than the estimate for the first quarter of 2012.
  • By asset type the largest level of net investment in the second quarter of 2012 was in overseas securities.
  • Q2 2012 saw a continued trend of disinvestment in UK corporate securities.

Overview

This release contains quarterly net investment data arising from financial transactions (investments) made by insurance companies, self-administered pension funds, investment trusts, unit trusts and property unit trusts. Also included are quarterly balance sheet data for short-term assets and liabilities, along with income and expenditure data for insurance companies and self-administered pension funds. All data are reported on a current price basis.

In addition, every third quarter release contains annual balance sheet data for all the institutional groups; providing information on the market value of assets and liabilities. Annual income and expenditure data for insurance companies are also reported at this time.

We are aware that a number of users make use of these data for modelling or forecasting purposes. In doing so, careful attention should be paid to the revisions policy (50.7 Kb Pdf) for this release.

A glossary (186.1 Kb Pdf) is available to assist users with their understanding of the terms used in this release.

User engagement

We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have, and would be particularly interested in knowing how you make use of these data to inform your work. Please contact us via email: Financial.Inquiries@ons.gsi.gov.uk or telephone David Matthews on +44 (0)1633 456756.

Net investment by asset type

The total assets of the businesses covered by this release were valued at around £3,000 billion at the end of 2010, the latest period for which annual results are available (see background note 6). On average, these businesses, in a 12 month period, acquired and disposed of nearly £400 billion of assets. Net investment is the difference between these substantial levels of acquisitions and disposals and can therefore be volatile. Table 1 displays net investment data by asset type.

Net investment is estimated to have been £21 billion at Q2 2012 (Figure 1), which is higher than the average of £14 billion a quarter for 2011, but markedly lower than the revised Q1 2012 estimate of £38 billion. The estimate for Q2 2012 is in line with the three year average for this series of £19 billion.

Figure 1: Total net investment

Figure 1: Total net investment

Download chart

Short-term assets

Investment in short-term assets (those maturing within one year of their originating date) continued to be positive at Q2 2012. Since Q3 2010 there have been six quarters of net investment in short-term assets and only one quarter of net disinvestment (Q3 2011). This contrasts with the period Q4 2008 to Q3 2010 when six of the eight quarters showed net disinvestment in short-term assets. This longer-term comparison highlights how institutions, taking account of the prevailing economic climate, have chosen to restructure their investment portfolios.

Short-term assets investment can be affected by the level of net inflows of funds into the businesses concerned (premiums or contributions for example) and by the relative attractiveness of other investments, both in the returns they may potentially generate and in their perceived risk. At Q2 2012 the businesses covered by this release invested an estimated £3 billion in short-term assets (Figure 2). This is in contrast to a substantial net investment in short-term assets at Q1 2012 of £23 billion.

Figure 2: Net investment in short-term assets

Figure 2: Net investment in short-term assets

Download chart

British government sterling securities (gilts)

Since the end of 2008, the yield on gilts has tended to fall and, although this investment is effectively risk-free, the returns on it may cause fund managers to switch into or out of gilts. The fund managers of institutions covered by this release invested around £1 billion in gilts at Q2 2012 (Figure 3). This is in line with the 2011 average when net investment was relatively flat and in stark contrast to 2010 when gilts attracted net investment of £29 billion.

Figure 3: Net investment in British government sterling securities

Figure 3: Net investment in British government sterling securities

Download chart

UK corporate securities and overseas securities

The last survey of these businesses’ balance sheets, for the end of 2010, showed that for the first time the value of overseas ordinary shares held by these institutions then exceeded the value of UK ordinary shares. In 2011 as a whole (though we would need the revaluation data that are implicit in the balance sheet survey to be sure), Q1 2012 and Q2 2012, there was disinvestment in UK corporate securities and investment in overseas securities (Figures 4 and 5).

Figure 4: Net investment in UK corporate securities

Figure 4: Net investment in UK corporate securities

Download chart

 

Figure 5: Net investment in overseas securities

Figure 5: Net investment in overseas securities

Download chart

Other assets

Investment in ‘other assets’, which includes mutual fund investment, has been positive for a long period and remained so in the second quarter of 2012 (Figure 6). The estimate for Q2 2012 (£5 billion) is, however, slightly lower than the average level of investment in ‘other assets’ recorded for the second quarter of a year over the past four years.

Figure 6: Net investment in other assets

Figure 6: Net investment in other assets

Download chart

Table 1: Net investment by asset type

£ billion
   Total Short-term assets British government sterling securities UK corporate securities Overseas securities Other assets
2006    84.5 25.1 19.4 -16.6 33.4 23.1
2007  89.4 41.1 -0.4 -16.5 44.2 20.9
2008  25.5 -4.8 -19.6 7.4 15.3 27.3
2009    93.5 -4.2 13.9 9.1 43.3 31.3
2010    71.1 -7.6 29.2 -18.5 24.8 43.2
2011    54.9 9.7 1.5 -18.6 27.7 34.7
               
2006  Q3  19.6 8.5 4.2 -4.5 7.8 3.6
 Q4  18.4 0.1 6.8 -4.8 10.4 5.9
               
2007  Q1  16.9 1.2 7.9 -3.9 7.4 4.3
 Q2  21.8 11.3 -3.1 -5.0 16.8 1.8
 Q3  43.9 19.2 -5.1 5.2 18.0 6.6
 Q4  6.8 9.4 0.0 -12.8 2.0 8.2
               
2008  Q1  11.2 5.5 -6.6 3.3 3.7 5.2
 Q2  11.6 -0.3 -4.7 -0.1 8.6 8.1
 Q3  22.2 10.6 -2.2 2.8 7.3 3.8
 Q4 -19.5 -20.5 -6.1 1.4 -4.3 10.1
               
2009  Q1  7.8 -0.3 0.8 2.9 4.4 0.0
 Q2  37.7 0.8 3.3 7.3 17.7 8.5
 Q3  23.3 -8.0 8.2 1.7 13.0 8.4
 Q4  24.8 3.3 1.6 -2.8 8.2 14.4
               
2010  Q1  4.2 -1.1 8.6 -8.8 1.9 3.6
 Q2  7.1 -10.8 8.1 0.7 0.4 8.7
 Q3  29.5 -5.4 4.9 -0.2 13.7 16.5
 Q4  30.4 9.7 7.7 -10.3 8.9 14.4
               
2011  Q1  19.3 10.3 2.6 -5.0 7.3 4.3
 Q2  14.6 1.4 0.6 -1.0 7.1 6.4
 Q3  12.3 -3.5 -2.9 -1.6 7.9 12.3
 Q4  8.7 1.6 1.1 -11.1 5.3 11.8
               
2012  Q1  37.6 22.7 -4.7 -4.9 15.1 9.4
 Q2  20.6 3.1 0.9 -1.3 12.5 5.4

Table source: Office for National Statistics

Table notes:

  1. Components may not sum to totals due to rounding.
  2. Data for all quarters of 2011 remain provisional and subject to revision until the incorporation of the 2011 annual survey results in December 2012. Similarly, data for all periods of 2012 will remain provisional until December 2013.

Download table

 

Net investment by institutional group

Net investment data for each of the institutional groups covered by this release are displayed in Table 2.

Long-term insurance companies showed net investment of £1 billion (Figure 7) at the second quarter of 2012. As reported last quarter, disinvestment is still estimated to have occurred in three of the four quarters of 2011 and for 2011 as a whole, the first year this has occurred in this series which goes back to 1963.

Figure 7: Net investment by long-term insurance companies

Figure 7: Net investment by long-term insurance companies

Download chart

General insurance companies are estimated to have shown a broadly similar level of investment (£0.4 billion) at Q2 2012 to long-term insurance companies (£1 billion). This level of investment is also similar to the average level of investment recorded by general insurance companies on a quarterly basis over the past six years (Figure 8).

Figure 8: Net investment by general insurance companies

Figure 8: Net investment by general insurance companies

Download chart

Self-administered pension funds continued to invest during Q2 2012 (£10 billion) after a particularly high level of investment at Q1 2012. The estimate of net investment for Q1 2012 of £19 billion, despite being revised slightly downwards (from £20 billion), still stands as a record for this series which began in 1983.

Figure 9: Net investment by self-administered pension funds

Figure 9: Net investment by self-administered pension funds

Download chart

The trend in the figures for investment trusts at Q2 2012 continued broadly flat as it has been since the beginning of 2008 (see Table 2). Unit trusts and property unit trusts, however, continued to invest in the second quarter of 2012. In each of the last three years, net investment by these institutions has been over £30 billion a year. It looks like this trend is set to continue in 2012.

Figure 10: Net investment by unit, property unit and investment trusts

Figure 10: Net investment by unit, property unit and investment trusts

Download chart

Table 2: Net investment by institutional group

   Total  Long-term insurance companies  General insurance companies  Self-administered pension funds Investment trusts Unit & property unit trusts Consolidation adjustment
2006    84.5 25.0 12.0 23.7 -1.8 34.1 -8.6
2007    89.4 39.5 5.0 13.3 -2.8 32.8 1.7
2008    25.5 17.0 9.4 -20.4 0.3 17.7 1.5
2009    93.5 5.9 4.9 32.9 -0.6 46.8 3.6
2010    71.1 15.6 -3.2 19.7 0.5 44.0 -5.5
2011    54.9 -14.0 5.5 34.9 0.4 34.8 -6.7
                 
2006 Q3  19.6 5.6 2.3 5.1 -0.6 6.8 0.4
 Q4  18.4 9.8 -0.3 7.5 0.1 4.5 -3.1
                 
2007 Q1  16.9 10.4 -1.7 -1.4 -1.0 9.7 0.8
 Q2  21.8 7.3 -0.1 5.9 -0.2 12.8 -3.9
Q3  43.9 15.8 1.5 9.0 -0.4 11.1 6.8
 Q4  6.8 5.8 5.3 -0.2 -1.2 -0.9 -2.1
                 
2008 Q1  11.2 9.9 0.8 -3.9 0.6 6.5 -2.7
 Q2  11.6 6.8 3.3 0.9 -0.7 3.5 -2.3
 Q3  22.2 11.4 4.5 0.1 0.8 5.1 0.2
 Q4  -19.5 -11.1 0.7 -17.6 -0.4 2.6 6.4
                 
2009  Q1  7.8 0.8 1.4 2.6 -0.3 7.9 -4.7
 Q2  37.7 12.2 1.6 13.8 -0.2 11.0 -0.8
 Q3  23.3 1.2 -0.8 8.0 0.1 15.6 -0.8
 Q4  24.8 -8.4 2.7 8.6 -0.2 12.3 9.9
                 
2010  Q1  4.2 1.1 -6.5 -0.1 -0.7 7.9 2.4
 Q2  7.1 2.7 0.4 -6.3 0.7 15.2 -5.5
 Q3  29.5 7.4 0.8 15.1 0.0 7.4 -1.1
 Q4 30.4 4.5 2.0 11.0 0.5 13.6 -1.3
                 
2011  Q1  19.3 -7.5 0.1 18.2 0.6 7.4 0.4
 Q2  14.6 -1.3 2.2 2.8 0.3 11.5 -0.8
 Q3  12.3 0.4 1.8 5.3 -0.1 9.5 -4.6
 Q4  8.7 -5.6 1.4 8.6 -0.5 6.4 -1.7
                 
2012  Q1  37.6 2.6 3.1 19.4 -0.1 12.5 0.0
 Q2  20.6 1.2 0.4 9.7 0.2 8.0 1.1

Table source: Office for National Statistics

Table notes:

  1. Components may not sum to totals due to rounding.
  2. Data for all quarters of 2011 remain provisional and subject to revision until the incorporation of the 2011 annual survey results in December 2012. Similarly, data for all periods of 2012 will remain provisional until December 2013.
  3. The consolidation adjustment is an adjustment to remove inter-sectoral flows between the different types of institutions covered by this statistical bulletin. The adjustment includes (i) investment in authorised unit trust units and investment trust shares by insurance companies, pension funds and trusts and (ii) investment by pension funds in insurance managed funds.

Download table

Income and expenditure by institutional group

Rather than provide commentary on total income and expenditure for the institutional groups, it was considered more beneficial to users if commentary concentrated on the main components. For insurance companies, premiums and claims are the focus, while contributions (net) and payments are the focus for self-administered pension funds (Table 3). It should be noted that no income and expenditure data are currently collected for the trusts institutional group.

Long-term insurance premiums, at £28 billion in the second quarter of 2012 (Figure 11), were at a very similar level to all quarters of the past three years, but were slightly below the five year quarterly average of £30 billion.

Back in 2006 and 2007 the value of premiums exceeded the value of claims. This trend has been reversed since and has continued into 2012. In each of the years 2008 to 2010, the value of claims was around 23 per cent greater than the value of premiums. In 2011, claims amounted to £141 billion against premiums of £108 billion (a 30 per cent difference). At Q2 2012, claims (£36 billion) were 28 per cent greater than the value of premiums (£28 billion).

Figure 11: Long-term insurance companies' premiums and claims

Figure 11: Long-term insurance companies' premiums and claims

Download chart

For general insurance, premiums (£10 billion) were 71 per cent greater than the value of claims (£6 billion) at Q2 2012 (Figure 12). These series have remained relatively unchanged for the past six years.

Figure 12: General insurance companies' premiums and claims

Figure 12: General insurance companies' premiums and claims

Download chart

Contributions (net) to self-administered pension funds for the second quarter of 2012 (£10 billion) were on par with contributions for the second quarters of 2011 and 2010 (£10 billion and £12 billion respectively). Last quarter we reported, for Q1 2012, the highest level of contributions to self-administered pension funds since these data were first collected in 1992. The revised estimate for Q1 2012 of £16 billion is still a record and demonstrates how there would seem to be a pattern of behaviour for funds to make one-off payments to reduce the deficits in their funds at Q1 and Q4 of a given year, leading to a tendency for the figures for the first and fourth quarters to be higher than those for the other quarters of the year (Figure 13). It will be interesting to see if this pattern continues for 2012 after such a strong Q1 estimate.

Figure 13: Self-administered pension funds' contributions (net) and payments

Figure 13: Self-administered pension funds' contributions (net) and payments

Download chart

Table 3: Income and expenditure by institutional group

£ billion
  Long-term insurance General insurance Self-administered pension funds
Premiums Claims Premiums Claims  Contributions (net) Payments
2006   142.0 132.3 40.3 25.5 40.5 39.9
2007   166.2 156.9 36.9 24.3 38.7 39.1
2008   135.1 166.9 41.7 26.1 34.3 41.1
2009   114.6 141.1 39.5 26.4 37.7 44.5
2010   111.2 136.1 34.3 24.8 45.6 48.3
2011   108.0 140.7 34.9 23.9 43.1 48.8
               
2006  Q3 35.8 34.9 9.8 7.2 8.5 10.3
 Q4 40.9 35.0 9.6 6.4 11.8 10.4
               
2007  Q1 41.3 40.2 7.8 6.2 10.7 9.4
 Q2 45.0 39.4 10.0 5.8 9.2 9.7
 Q3 47.0 37.6 9.4 5.9 8.7 9.7
 Q4 32.8 39.6 9.7 6.4 10.1 10.3
               
2008  Q1 29.6 38.8 11.6 6.9 10.1 9.8
 Q2 40.8 41.1 10.1 6.5 8.2 10.1
 Q3 36.1 39.9 10.1 6.1 7.8 10.5
 Q4 28.6 47.1 9.9 6.7 8.2 10.7
               
2009  Q1 27.0 32.6 9.7 6.8 10.2 10.3
 Q2 28.0 27.9 10.8 6.5 7.7 11.2
 Q3 29.5 35.4 10.0 6.5 8.1 11.4
 Q4 30.1 45.1 9.0 6.6 11.7 11.6
               
2010  Q1 29.3 38.3 7.9 5.9 11.9 12.0
 Q2 29.0 33.2 9.0 5.9 11.5 12.2
 Q3 23.1 30.3 8.8 6.2 10.3 12.1
 Q4 29.8 34.3 8.6 6.7 11.9 12.0
               
2011  Q1 26.6 36.9 8.7 6.3 12.4 11.8
 Q2 28.2 34.5 9.4 6.0 9.8 12.5
 Q3 26.0 31.6 8.6 5.8 9.4 12.4
 Q4 27.2 37.7 8.2 5.8 11.5 12.2
               
2012  Q1 27.4 34.3 9.5 6.2 15.9 12.5
 Q2 28.3 36.2 9.9 5.8 10.2 13.3

Table source: Office for National Statistics

Table notes:

  1. Components may not sum to totals due to rounding.
  2. Data for all quarters of 2011 remain provisional and subject to revision until the incorporation of the 2011 annual survey results in December 2012. Similarly, data for all periods of 2012 will remain provisional until December 2013.

Download table

Background notes

  1. Institutional groups

    Insurance companies

    Active in both life insurance and non-life (general) insurance, they also conduct pension business on behalf of companies and individuals. Long-term business (mainly life insurance and pensions) has an emphasis on the spreading of risks over time, whereas general business is mainly concerned with the spreading of risks between persons and organisations.

    Besides consisting largely of life insurance, long-term business also includes occupational and individual pension business. Pension business includes both insured funds and insurance managed funds. Insured funds belong to pension schemes where the schemes’ trustees hold, as a sole asset, an insurance policy contract or an annuity contract. All the schemes’ assets are held in one insurance company and have a guaranteed level of return.

    The figures for long-term funds include items relating to shareholders' funds in respect of pure life companies. For other companies these items are consolidated into the figures for general funds.

    Self-administered pension funds

    The data in this release relate to the self-administered pension and superannuation funds of the private sector and to the funded, self-administered schemes of local authorities and employees previously employed in the nationalised industries.

    Insurance managed funds are included in the self-administered pension funds statistics .The main superannuation arrangements in central government are unfunded and these are excluded from the statistics. Fully insured funds are also excluded but their activity is included in figures for insurance companies' long-term business.

    A self-administered pension scheme is defined as an occupational pension scheme with units invested in one or more managed schemes or unit trusts. The trustees of these types of schemes can employ either an in-house fund manager to make the day-to-day investment decisions or they can opt to use an external manager to manage the investment.

    Investment trusts

    The figures cover investment trusts recognised as such by HM Revenue & Customs for tax purposes and some unrecognised trusts. Investment trusts companies acquire financial assets with money subscribed by shareholders or borrowed in the form of loan capital. They are not trusts in the legal sense, but are limited companies with two special characteristics: their assets consist of securities (mainly ordinary shares) and they are debarred by their articles of association from distributing capital gains as dividends. Shares of investment trusts are traded on the Stock Exchange and increasingly can be bought direct from the company.

    Unit trusts

    The data covers unit trusts authorised by the Financial Services Authority under the terms of the Financial Services Act 1986. The statistics include open ended investment companies but they do not cover other unitised collective investment schemes (e.g. unauthorised funds run on unit trust lines by, for example, securities firms and merchant banks, designed primarily for the use of institutional investors) or those based offshore (Channel Islands, Bermuda etc.) or in other EU Member States. Unit trusts are set up under trust deeds, the trustee usually being a bank or insurance company. The funds in the trusts are managed not by the trustees, but by independent management companies. Units representing a share in the trusts’ assets can be bought from the managers or resold to them at any time.

    Property unit trusts

    The statistics aim to cover all UK property unit trusts authorised under the terms of the Financial Services Act 1986. The trusts are not allowed to promote themselves to the general public and participation is generally restricted to pension funds and charities. Property unit trusts invest predominantly in freehold or leasehold commercial property yet may hold a small proportion of their investments in the securities of property companies. Their assets are held in the name of a trustee and are managed on a co-operative basis by a separate committee (elected by the unit holders) or company.

     

  2. Basic quality information

    A Quality and Methodology Information (QMI) report (270.2 Kb Pdf) can be found on the Office for National Statistics (ONS) website. The aims of the QMI report are to provide users with a greater understanding of ONS’s statistics, their quality and the methods that are used to create them.

  3. Uses of data

    The primary use of data from the insurance companies, pension funds and trusts surveys is in the Financial and Sector Accounts and the compilation of Gross Domestic Product (GDP) estimates within the UK National Accounts and the UK Balance of Payments. There are numerous other users within and outside government who use the data to produce various financial analyses and to inform policy decisions. Such users include:

    Bank of England: Data are used for monetary policy and financial stability purposes.

    Department for Work & Pensions: Specifically interested in the investment activity of pension funds, and any pension business undertaken by insurance companies.

    HM Revenue and Customs: Data are used to aid taxation analysis of financial institutions.

    Association of British Insurers: Compare its own data with that of ONS, to ensure both datasets display similar trends.

    Department for Business, Innovation and Skills: Use data to analyse investment activity across various financial instruments.

    Debt Management Office: Data are used to monitor the investment activity in British government securities (gilts).

    Investment Management Association: Compare its own data with that of ONS to ensure both datasets display similar trends. It also uses the data to provide an overall view of the UK savings and pensions markets and the components that make it up.

    European Union’s Statistical Office (Eurostat): Use data to compile statistics at a European level to enable comparisons between countries.

    Organisation for Economic Co-operation and Development (OECD): Analyse investment activity to help formulate economic growth and financial stability recommendations for member countries.

    Trade associations, city analysts, institutional investors and fund managers use these data for modelling or forecasting purposes and also to track asset allocation trends. Academics and journalists also use the data for research purposes.

     

  4. User engagement

    We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have, and would be particularly interested in knowing how you make use of these data to inform your work. Please contact us via email: Financial.Inquiries@ons.gsi.gov.uk or telephone David Matthews on +44 (0)1633 456756.

    There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society’s new interactive site for users of official statistics. The community objectives are to promote dialogue and share information between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links above.

  5. International comparisons

    It is difficult meaningfully to compare the 'Investment by Insurance Companies, Pension Funds and Trusts' release with that of other countries. This is largely due to different rules and regulations surrounding insurance and pension provision, and also because other countries don’t combine data for these specific institutional groups into a single detailed publication. The focus for other countries is frequently on collecting the data for National Accounts purposes, not on producing a separate publication for these institutional groups.

    Many countries around the world use different sources to collect these data. In some cases the data collection is split between the national statistical office and the central bank (Belgium) or the industry regulator (Finland). The periodicity of data collection also varies between countries; some collect data quarterly (Sweden), others on an annual basis (New Zealand). In addition, some countries use a transactions approach (UK) to data collection, while others prefer a balance sheet style (Ireland).

    International bodies such as the Organisation for Economic Co-operation and Development (OECD) compare institutional investment data across countries to help formulate economic growth and financial stability recommendations.

  6. Revisions

    Data for all quarters of 2011 remain provisional and subject to revision until the incorporation of the 2011 annual survey results in December 2012. Similarly, data for all periods of 2012 will remain provisional until December 2013.

    A revisions policy (50.7 Kb Pdf) is available to assist users with their understanding of the cycle and frequency of data revisions. Users of this release are strongly advised to read this policy before using the data for research or policy related purposes.

    Quarterly

    In the first quarter of 2012, net investment has been revised from £34.0 billion to £37.6 billion, partly as a result of late questionnaires being received and partly as a result of disaggregate data revisions.

    Revisions to data provide one indication of the reliability of key indicators. The table below compares the first published estimate for total net investment with the equivalent figure published three years later. The data starts with the first estimate published for Q3 2004 (in December 2004) and compares this with the estimate for the same quarter published three years later (in December 2007). The difference between these two estimates is calculated and this process is repeated for five years of data (all quarters up to Q2 2009). The averages of this difference (with and without regard to sign) are shown in the right hand columns of the table. These can be compared with the value of the estimate in the latest quarter. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows if the test is significant.

    Table 4: Revisions between first publication and estimate three years later

    £ billion
      Value in  latest quarter   Average  revision Average revision without regard to sign
    Total net investment 20.6 1.3 5.6

    Download table

    A spreadsheet is available giving a revisions triangle (336 Kb Excel sheet) of estimates from 1996 to date and the calculations behind the averages in the table.

    Annual

    The introduction of annual survey results with the third quarter figures each year leads to revisions of the published quarterly estimates, both to income and expenditure, and to transactions data. Revisions to transactions data are usually caused by problems with quarterly misreporting of data by businesses, which are identified as part of the quality assurance of the corresponding annual survey returns made by the businesses.

    For income and expenditure, the revisions are due to the incorporation of the annual insurance survey results, which are based on larger samples and also, generally reflect audited accounts. It is important to note that for both the pension funds and trusts sectors an annual income and expenditure survey is not undertaken.

    For each ‘set’ of surveys (for example, quarterly transactions and quarterly income and expenditure surveys for pension funds) there is a common sample, but each survey is conducted independently, which can result in different response rates. In some instances individual survey questionnaires are completed by different people within the same business, and with limited linkage within existing systems between the surveys at the individual respondent level.

    Therefore, there can be discrepancies at an aggregate level between the numbers emerging from the transactions and income and expenditure surveys. The set of annual surveys includes balance sheet data from the insurance companies and pension funds sectors. This allows the data to be ‘aligned’ so that transactions, income and expenditure and the balance sheet are consistent.

    The alignment process assumes that the transactions data are the weakest of the three strands of information and therefore take the necessary adjustment. This assumption has been confirmed by contact with respondents when data have been queried. It is important to note that no alignment process is currently undertaken for the trusts sector.

    The following table shows the average absolute values and revisions (without regard to sign), over the last five years (2006 to 2010), arising from the take-on of the annual survey results.

    Table 5: Average values and revisions (2006 to 2010)

      Average absolute values Average absolute revisions
    Long-term insurance companies  
         Total income 205.5 13.7
         Total expenditure 198.7 7.0
         Net Investment 20.6 13.4
         
    General insurance companies  
         Total income 47.7 3.5
         Total expenditure 45.9 3.4
         Net Investment 5.6 3.8
         
    Self-administered pension funds  
         Net Investment 13.8 8.3
         
    Total net investment 72.8 12.0

    Download table

    Future revisions

    The next release of this statistical bulletin, in respect of Q3 2012, will contain a new version of reference table 6.2 (Unit Trusts and Property Unit Trusts’ Assets at Market Values) as well as a revision to the consolidation adjustment used to remove inter-sectoral flows between the different types of institutions covered by this release. A short information note will be published alongside the Q3 2012 release, which will serve to fully explain the methodological reasons for these changes.

  7. Response rates

    The figures in this release are based on a system of quarterly and annual surveys collecting data on income and expenditure, transactions in financial assets and the balance sheet in separate surveys.

    Table 6: Overall response rate by survey

    Q2 2012   %
    Transactions    
         Long-term insurance companies 91
         General insurance companies 92
         Self-administered pension funds 82
         Unit trusts   87
         Investment trusts 98
         Property unit trusts 100
         
    Income and expenditure  
         Long-term insurance companies 96
         General insurance companies 91
         Self-administered pension funds 79
         
    2010 Annual   %
    Balance sheet    
         Long-term insurance companies 99
         General insurance companies 96
         Self-administered pension funds 92
         
    Income and expenditure  
         Long-term insurance companies 100
         General insurance companies 98
         
    Assets and liabilities  
         Unit trusts   91
         Investment trusts 98
         Property unit trusts 100

    Download table

  8. General information

    These points should be noted when examining data tables:

    • Total pension contributions made to funded schemes cannot be derived by summing pension premiums from table 2.4 and contributions from table 4.3. To do so would result in double counting since pension business premiums in table 2.4 include any premiums (including transfers) received from self-administered pension funds and any transfers within the long-term insurance sector. More information on this and on other work undertaken to improve pension statistics as part of the 2002 pension contributions statistics review can be found on the ONS website. These pages include a discussion note (25.5 Kb Pdf) on how insurance companies have been recording pension transactions in the surveys used as a source for this release and on improvements made to the survey questionnaires from the first quarter of 2004 to prevent mis-reporting.

    • Certificates of deposits issued by overseas banks are included in short-term assets overseas.

    • An increase in borrowing is indicated by a positive figure, a decrease by a negative figure.

    • Total net investment for long-term funds includes investment by self-administered pension funds in insured funds.

    • Loans to parent authority by local authority funds are included with UK local authority securities.

    • The consolidation adjustment is an adjustment to remove inter-sectoral flows between the different types of financial institution covered by this release. It has been calculated by identifying and calculating totals for net investment in mutual funds such as authorised unit trust units, investment trust securities and insurance managed funds by the institutions.

    • Components in tables denominated in £ billion may not sum to totals due to rounding.

  9. Definitions and symbols used

    †   data have been revised since the last edition; the period marked is the earliest to have been revised

    ..   not available

    -    nil or less than £0.5m

    A glossary (186.1 Kb Pdf) is available to assist users with their understanding of the terms used in this release.

  10. Disclosure

    It is sometimes necessary to suppress figures for certain items in order to avoid disclosing investment activity by individual institutions. In these cases the figures are usually combined with those for another item and this will be indicated in the tables by means of a footnote.

     

  11. Social media

    Follow ONS on Facebook

    and Twitter

  12. ONS business statistics

    To find out about other official business statistics, and choose the right data for your needs, please use our interactive guide.

    This will help you to find relevant statistics published by ONS. The guide allows you to choose the industry, feature of the economy and geography you are interested in, and returns a list of the available ONS indicators, together with guidance on their use, and links to releases.

  13. Special events

    ONS has recently published commentary, analysis and policy on 'Special Events' which may affect statistical outputs. For full details go to the Special Events page on the ONS website.

     

  14. Release policy

    All data in this release can be downloaded free of charge from the ONS website. Here are the instructions to obtain a full time series of data from the statistical bulletin or release pages:

    • Select 'Data in this release',

    • Select 'View datasets associated with this release',

    • Select the latest release,

    • Select 'Select series from this dataset',

    • Select the reference table of interest,

    • Select 'View series',

    • Select the series of interest (Hint: for a custom download you can use SHIFT to select a range of series or CRTL to select multiple individual series),

    • Select 'View selection',

    • Select 'Download'.

  15. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
David Matthews +44 (0)1633 456756 Financial Inquiries Financial.Inquiries@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
Content from the Office for National Statistics.
© Crown Copyright applies unless otherwise stated.