- The defined contribution (DC) landscape continues to concentrate with the number of schemes with more than 5000 members hitting 140 in Jan 2022. This is up from 80 in 2012. The number of schemes with between 12-99 members collapsed down from 2260 to 660.
- The largest schemes account for over 22.7m DC members.
- Aggregate asset values are now £113.5bn, an increase of £26bn or 30% since last year and 413% since the beginning of 2012.
- Average assets per membership are currently £5,212. However, in 2012 it was £17,206 per membership.
The Pensions Regulator has issued defined contribution trust scheme data DC trust: scheme return data 2021 to 2022 | The Pensions Regulator
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“Bigger is better when it comes to DC pensions, with the number of small schemes continuing to decline in favour of the burgeoning master trust market and the introduction of auto-enrolment swelling the numbers of members.
Asset levels are also on the rise – growing a massive 413% since January 2012. However, this isn’t corresponding to higher levels of pension assets per member – average levels have collapsed 70% to just over £5,212 since 2012.
So not everything is booming in the DC market – average pension pots still need a boost. There might be many more people saving into a pension but overall, they are saving less – the vast majority of people won’t be saving more than the current auto-enrolment minimum of 8%. While many of these members will still be young and have many years to build up a good level of pension, they need to be doing all they can to bolster the amount they contribute above these minimums if they are to build a firm foundation for their retirement.
Making small changes such as increasing your contribution every time you get a pay-rise can really make a difference over time. Another key thing is that your employer may contribute more if you do, so it’s worth seeing if that is an option as that can really boost your retirement pot.”