There was an 20 per cent increase in the value of private sector workplace DC schemes between the end of March and September last year, according to new figures from the Office of National Statistics.
The total value of assets in these schemes now stands at £63bn, with this increase largely due to the rise in the value of underlying investments. These figures cover both multi-employer DC schemes and single-employer DC trusts.
However, the ONS data set shows these value of these assets still lag behind the money tied up in private sector DB schemes, despite relatively subdued growth of assets in this sector. Figures for same period show total assets in occupational DB schemes grew by just 2 per cent, but stand at £1,120bn.
The ONS says the growth in DC assets reflect the rising value of equities over this period. It points out that the FTSE all share UK equity index increased by 3 per cent in the second quarter of 2025 (April to June) and 6 per cent in the July to September period. Meanwhile the S&P 500 US equity index rose by 19 per cent over these six months.
Data published in the ONS Financial Survey of Pension Schemes, also shows how job mobility is leading to more deferred pension pots, even as overall contribution levels continue to rise.
Figures show membership of deferred private sector DC pensions has now reached 23m for the third quarter of 2025, up by over 2 million compared to the same period in 2024.
Over the same period, membership of active pots saw has only risen by 0.15m, increasing from 11.45m to 11.6m.
Broadstone head of DC proposition Kelly Parsons says: “These figures show how the small pots issue is being driven by a more mobile workforce, with employees moving jobs, being automatically enrolled into new schemes and leaving pension pots behind rather than consolidating them. This is now becoming a structural feature of the pensions system and is another challenge to retirement planning and adequacy.”
She adds: “While the small pots issue is often discussed as an industry or provider challenge, it is increasingly becoming an employer issue as well. Employers are automatically enrolling new joiners who may already have multiple pension pots which increases administration, adds complexity to scheme governance and can make it harder to engage employees with their retirement savings.
“As the number of deferred pots continues to grow, employers will need to play a bigger role in helping employees understand their pension options, including consolidation, and ensuring their workplace pension remains competitive, well-governed and delivers good member outcomes.
“This strengthens the case for wider policy solutions such as small pots consolidation and pensions dashboards to reduce fragmentation across the system.”
