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More people are saving more money into DC pensions, data reveals

Ref: PN18-03
Thursday 25 January 2018

New figures released by The Pensions Regulator (TPR) reveal that £5.4 billion was put into defined contribution (DC) pension schemes last year, an increase of more than 21% year on year.

TPR’s annual DC trust report shows that a total of £48 billion is now saved in DC pension schemes.

Memberships have increased to 12.6 million people, up by 29% over the past year and by more than 400% since the start of 2010. Master trusts account for a major proportion of the increase and now account for 10 million DC savers.

Anthony Raymond, Acting Executive Director for Regulatory Policy, Analysis and Advice at TPR, said: “The success of automatic enrolment (AE) has put DC schemes – and particularly master trusts – at the heart of pension saving in the UK, and our figures illustrate this trend.

“For these new and existing savers we have a role to protect their benefits and so we are working hard to drive up standards of trusteeship. We are also implementing the Pension Schemes Act 2017, which requires master trusts to meet a clear set of standards in order to obtain authorisation from us to operate.

“We welcome the continued reduction in numbers of DC schemes. We have been concerned about a tail of sub-standard schemes and have been encouraging trustees who cannot or will not meet the standards we expect to consider consolidation.”

Other key findings of the DC trust report include:

  • 90% of people currently saving into a private sector pension are doing so into a DC scheme.
  • The reduction in the number of schemes continues. Since 2010 the number of schemes, not including micro or self-administered schemes, has reduced by 52% from 4,560 to 2,180.
  • Membership of master trusts has increased from 270,000 at the start of 2012 to almost 10 million in 2017.
  • As more people start saving into pension schemes for the first time, the average asset per membership has declined from £4,700 in 2016 to £3,900 in 2017.

Editor's notes

  1. The information in this report is based on data provided by schemes on returns we issued from July to December 2017 and related to the levy year 2016 - 2017 or earlier. Therefore the figures may not yet reflect all changes in DC memberships (including from AE) from October 2012 through to December 2017.
  2. The scheme return is how we collect information about occupational schemes. DC schemes with 12 or more members complete a scheme return annually and schemes with 2 to 11 members currently complete once every three years. Single member schemes are not required to complete a return.
  3. This report can be read in conjunction with TPR’s AE publications including its monthly declaration of compliance reports, which provide the latest membership information as a result of the reforms.
  4. Figures refer to occupational DC schemes with 12 or more members, so exclude hybrids, micro DC schemes and personal DC schemes.
  5. As of March 2017, there were 10.5 million members in defined benefit (DB) schemes and a total of £1,541 billion assets in DB schemes, according to the PPF’s Purple Book.
  6. TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).

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