-
New DC landscape data shows the number of non‑micro
DC and hybrid schemes fell by 15% in the last year, from
920 in 2024 to 790 in 2025
-
Reductions are concentrated among schemes with fewer
than 5,000 members, while the number of larger
schemes remains stable
-
Upcoming Pension Schemes Bill requirements mean
trustees must urgently assess whether
continuing, consolidating or winding up is in
members' best interests
The Defined Contribution pensions market is changing - and
changing quickly. New figures from TPR's DC landscape analysis
show a further 15% drop in non‑micro DC and hybrid schemes over
the past year, matching the steep reduction seen in 2023-24. This
represents the largest proportional decline to date, signalling a
continued shift toward larger, better‑governed schemes capable of
delivering stronger returns and an improved experience for
savers.
In a new blog published today, Kim Goodall‑Brown, TPR's
Director of Defined Contribution and Master Trust Supervision,
sets out why trustees of smaller DC schemes must now take a
clear-eyed look at their future. She acknowledges that, for many,
the decision to consolidate is not
straightforward - but stresses that securing the best
possible outcomes for members must be paramount.
Kim notes that the Pension Schemes Bill, expected to become
legislation soon, will introduce new and significant legal duties
for most schemes providing DC benefits. These include providing a
default guided retirement solution, undertaking a new value for
money assessment that requires comparison against other schemes
or benchmarks, and facilitating small pot transfers for
auto‑enrolment members with deferred pots of £1,000 or
less.
“Running a smaller scheme is becoming more complex, more
demanding and more resource‑intensive,” Kim writes. “Trustees
need to consider now whether they can continue to meet these
higher expectations - or whether members would be
better served through consolidation into a larger scheme with
stronger governance and scale.”
She highlights that for many small schemes, the cost and
administrative burden of meeting the new requirements will
increase significantly. At the same time, larger schemes are
better positioned to invest in member communications, data
quality, operational resilience and long-term
investment strategies. Taken together, these factors mean
trustees must urgently assess whether continuing
alone remains the right choice.
Kim encourages trustees to consider both consolidation and
wind‑up options. Consolidation into a master trust may offer
better long‑term value when taking into account future
compliance costs and the potential consequences of breaches. For
some schemes, winding up may be more appropriate. TPR has
published updated guidance to support both routes, including new
materials for trustees considering a transfer to a master trust
and refreshed wind‑up guidance.
She stresses that these decisions take time -and trustees
cannot wait until new duties take effect. For example, data
collection for the value for money framework is expected to begin
in 2027, meaning schemes must begin preparations well ahead of
this.
Kim concludes that TPR will continue supporting trustees and
providing clarity as secondary legislation develops.
Read the blog: DC scheme consolidation:
why trustees must take action now
Notes to editors
DC scheme numbers
The number of non‑micro DC and hybrid schemes fell from 920
in 2024 to 790 in 2025, a 15% reduction. Similar reductions were
seen in 2023–24, marking the largest proportional decreases since
data collection began.
Pension Schemes Bill -key requirements for DC
schemes
Once enacted, the Bill will introduce duties for trustees
providing DC benefits including:
- delivering a default guided retirement solution
- conducting a value for money assessment, including data
publication, analysis and benchmarking
- facilitating transfers of deferred small pots worth £1,000 or
less in auto‑enrolment schemes
Consolidation and winding up
TPR has issued updated guidance for trustees considering
transfers to master trusts and refreshed guidance for schemes
assessing whether winding up is appropriate.
