Defined contribution (DC) pension assets are on track to surpass defined benefit (DB) assets by the end of the decade.
This is according to analysis by insurtech firm Lumera which used projections from the Department for Work and Pensions included in the interim report from the Pensions Commission.
It found that DC assets are expected to grow from around £772bn in 2026 to £1.24tn by 2035. Meanwhile, DB assets are projected to fall from £1.17tn to £524bn over the same period.
The analysis suggests DC assets will overtake DB assets for the first time in 2030, when DC savings are expected to reach £987bn compared with £924bn in DB schemes and DC assets are then expected to exceed £1tn for the first time in 2031.
But total private sector pension assets are projected to fall overall, declining from around £1.94tn in 2026 to £1.76tn by 2035.
Lumera commercial director of data and dashboards Maurice Titley says: “These projections from DWP underline the speed of the current evolution taking place across the UK pensions market.
“With the vast majority of DB schemes having been closed to new members for some time, DC assets are now forecast to become the foremost component of pension wealth in the UK by 2030 and exceed £1 trillion in 2031.
“It highlights the scale of transformation that the DC market is currently undergoing and the challenge that lies ahead for providers. Millions more members are saving into DC pots at a time of rapid regulatory change, AI development and growing focus on outcomes.
“This sustained growth in the DC market is inevitably increasing demand for highly scalable, digital-first platforms capable of delivering better engagement, more efficient operations and improved retirement outcomes at scale.
“The pace of change now means operational resilience, clean data and modern technology are becoming increasingly central to how pension schemes compete, evolve and manage this transition over the next decade.”
