The number of defined contribution schemes fell under 1,000 for the first time in 2024, as the market continues to “radically reshape” towards fewer, larger pension schemes.
The Pensions Regulator’s 2024 DC landscape report showed the number of DC schemes decreased 15% in 2024 to 920.
The drop in the number of schemes is primarily driven by those with fewer than 5,000 memberships, TPR said.
Driving consolidation was at the heart of TPR’s three-year corporate plan released last year, with its research finding smaller schemes are likely to have poorer standards of governance.
Nausicaa Delfas, chief executive of TPR, said: “Our DC landscape report is further evidence of the evolution towards a pensions market of fewer, larger pension schemes, which we believe are better placed to deliver for savers and drive growth in savers’ interests.
“Value for money should be the guiding principle that runs through the DC system and where schemes cannot compete with the very best, they should consolidate and exit the market.”
The report also found that members in DC schemes increased 6% from 28.8 million members in 2023 to 30.6 million members in 2024. Active members remained at 11.1 million, but deferred members increased by 10% from 17.7 million to 19.5 million.
Meanwhile, master trusts continue to provide for most DC members, holding 28 million memberships and £166 billion in assets.
Main image: ty-feague-gnDbEnWFMWs-unsplash
