Asset managers and the investment industry must play their part
in the ‘pensions revolution' and bring forward new funds and
investment products which deliver long-term value, The Pensions
Regulator (TPR) said today.
In a speech, TPR CEO
Nausicaa Delfas challenged investment managers to innovate and
help scheme trustees diversify their investments to deliver
better outcomes for savers.
Addressing delegates at the annual conference of the Investment
Association, Ms Delfas said: “We all have a chance to shape the
changing landscape so that in 10, 20, 30 years' time – people who
are working hard and saving today can have a comfortable
retirement. So I ask this question…what are you doing to play
your part in the pensions revolution?”
Delivering long-term value for pension savers
Her comments come as the pensions market undergoes rapid change,
moving towards fewer, larger pension schemes delivering real
value for money for savers.
Across 2023-24 the defined contribution (DC) pension system saw
the:
- number of memberships grow to more than 30 million – up 6%
annually
- volume of assets under management grow by 25%
- number of schemes reduce by 15% as smaller schemes exited the
market
At the same time, the number of long term asset funds (LTAFs) has
increased from one in 2023 to eight umbrella funds and 23
sub-funds in 2025 as schemes seek more diversified investment
opportunities.
In response, the regulator's CEO described this as a “pivotal
time” for the industry as savings schemes transform into holistic
pensions systems, thanks in part to the Pension Schemes Bill. As
the system evolves, she stressed that pension trusteeship needs
to come into line with other professions and corporate governance
standards, and noted TPR will be launching a new strategy to
guide trustees as they navigate this new world of mega funds and
superfunds.
Ms Delfas also highlighted the importance of the forthcoming
value for money framework, saying: “This will allow extra
scrutiny of schemes and drive positive, long-term outcomes for
savers.”
But as part of this long-term focus on value, Ms Delfas called on
investment managers to play their part in the new saving
landscape and provide trustees with genuine choice in investment
products so they can make good long-term decisions. She said:
“Are you being supportive enough of long-term assets? The FCA has
authorised LTAFs to provide DC schemes with access to illiquid
assets – could they be integrated into default strategies?
“Could you be designing multi-asset solutions that are optimised
for decumulation? Many DC pots lie in default funds that simply
aren't working hard enough – can you be more dynamic? More
personalised in your approach?
“It is incumbent on all of us to ensure that pots grow, and
people are protected in their older years.”
Notes to editors
- Read the speech here.
- Excluding micro and hybrid schemes, assets in DC schemes have
grown by 25%, from £164 billion in 2023 to £205 billion in 2024,
while the number of members increased by 6%, from 28.8 million
members in 2023 to 30.6 million members in 2024. The number of
non-micro DC and hybrid schemes decreased by 15% over the last
year, from 1,080 schemes in 2023 to 920 schemes in 2024, compared
to an 11% decrease the previous year. Master trusts continue to
provide for the majority of DC members. Master trusts hold 28.0
million memberships (91% of non-micro DC and hybrid schemes) and
£166 billion in assets (81% of DC schemes assets). (Figures from
TPR's occupational defined
contribution landscape in the UK 2024 report.)
- LTAF figures from LTAF - Fund Search - FCA
Register.
- FCA authorised the first LTAF in 2023: FCA authorises first
Long Term Asset Fund.
- TPR welcomed the Pension
Schemes Bill as transformative for savers through
scale and value.
- TPR has issued Private Market guidance for trustees of
occupational pension schemes who are considering investing in
private markets.
- Nausicaa announced plans for TPR's trusteeship strategy at
a recent speech to the
PMI.
- The Pensions Regulator is the regulator of work-based pension
schemes in the UK. Our statutory objectives are to:
- protect members' benefits
- reduce the risk of calls on the Pension Protection Fund
- promote, and improve understanding of, the good
administration of work-based pension schemes
- maximise employer compliance with automatic enrolment
duties
- minimise any adverse impact on the sustainable growth of
an employer (in relation to the exercise of the regulator's
functions under Part 3 of the Pensions Act 2004 only
