Over two fifths of the UK’s DC schemes still offer no decumulation products according to The Pensions Regulator, which has urged smaller schemes to act or consolidate in savers’ interests.
In advance of the introduction of guided retirement duty in the Pension Schemes Bill, TPR’s analysis of the occupational DC market showed that larger schemes are leading the way in supporting members when approaching retirement.
In addition, 13.4 million members are now offered drawdown at the point of retirement – a product not historically available within occupational schemes.
TPR analysis of data from DC scheme returns also showed that 86% of the largest schemes offer members at least one retirement income option. In contrast, just 46% of small schemes offer members any sort of decumulation product – and two fifths of all schemes offer members none at all.
However, 43% of all members – represented by 16% of schemes – can now access drawdown without leaving their schemes. According to TPR, the shift towards drawdown being offered in-scheme is largely driven by the growth of master trusts, which have the scale and governance to make it a reality.
Joey Patel, TPR director of policy, said: “Too many members in smaller schemes are left without support when they reach retirement. This is not good enough.
“We urge trustees to start getting ready for the Pensions Schemes Bill by reviewing their offer and starting to design their decumulation products.”
Over half of all DB schemes are in surplus on a buy-out basis as of 31 March 2025, according to TPR research.
