Based on the DWP’s estimated projections, DC pension assets are forecast to increase from approximately £772 billion in 2026 to around £1.24 trillion by 2035, an increase of roughly £464 billion over the period.
In contrast, DB pension assets are projected to continue their long-term decline with the vast majority now closed for new business. Assets in DB schemes are estimated to fall from around £1.17 trillion in 2026 to approximately £524 billion by 2035, more than halving with a total decline of around £646 billion.
The projections suggest a pivotal transition point for the UK pensions landscape occurs in 2030, when DC assets are estimated to overtake DB assets for the first time. In that year, DC assets are projected to reach approximately £987 billion, compared to around £924 billion in DB schemes. Meanwhile, DC assets are set to hit the trillion mark for the first time in 2031, reaching £1.04 trillion.
Despite the strong expansion in DC savings, total private sector pension assets are projected to edge lower overall across the period, declining from approximately £1.94 trillion in 2026 to around £1.76 trillion by 2035. This represents a net fall of around £181 billion, or an average decline of approximately £20 billion per year.
While DC assets are growing rapidly, contribution levels from both employers and employees into DC pensions tend to be lower than the historical contribution rates that supported many legacy DB schemes. It means that the expansion of DC will not fully offset the scale of asset depletion occurring across mature DB arrangements during this transition period for the UK pensions system, demonstrating the significance of the Pension Commission’s inquiry into adequacy.
Maurice Titley, Commercial Director of Data and Dashboards at Lumera, commented: “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.”
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