The pensions sector is entering a defining period of structural change, being reshaped by consolidation, the focus on investment in growth, and an urgent spotlight on the need for people to save more, to understand what their savings are worth and to be supported and empowered to use them.
2030 Ready
In a new report published today – 2030 Ready– Pensions UK outlines what these changes are and the societal context influencing savers’ relationship with their pension savings.
The outlook for savers will be defined by macro-economic shifts with widening inequality, increased longevity, evolving expectations for retirement and more varied working lives on the journey towards taking a retirement income.
For pension schemes, consolidation will intensify into the 2030s with fewer, larger schemes and asset pools managing trillions of pounds on behalf of millions of savers.
By 2035, we expect:
master trust assets to grow from £165 billion to over £700 billion,
Local Government Pension Scheme assets to more than double, approaching £1 trillion,
defined contribution contract-based assets to rise to around £600 billion,
open defined benefit schemes will also continue to grow, but overall the size of the DB sector will continue to decrease.
At the same time, UK savers are facing growing uncertainty:
one in five workers are projected to fall short of even the minimum Retirement Living Standard,
life expectancy continues to rise. A woman turning 65 in the 2030s can expect to live to 89; a man, to 87. More will live past 100,
over 10% of over 65s are expected to be living in private rented accommodation by 2030,
over 3.8 million retirees are worried their money won’t last.
Against this backdrop, 2030 Ready outlines Pensions UK’s mission: to help everyone achieve a better income in retirement. To deliver on that we must do everything we can to prepare industry and the wider pension system for the next decade.
Pensions UK wants to see:
Above all, a pension system that provides an adequate retirement income to savers and is affordable and fair.
Adequate retirement incomes, delivered by a market that is well run and well regulated.
Pension investments that deliver strong risk-adjusted returns and play a positive role in society and the economy. Schemes exercising fiduciary duties responsibly and in the long-term interests of savers.
Savers supported in both work and retirement by a system that is simple and digital-first, and by advice and guidance that is effective and accessible.
Where we see red flags – like the risks attached to Government mandating investments – we will do all we can to represent the views of members and interests of savers.
Julian Mund, Chief Executive of Pensions UK, said: “To shape the world we want to see in the 2030s, we must respond to change with clarity and purpose. Our strategy for 2025 to 2029 will prepare Pensions UK and its members to thrive as we enter the next decade. We’ll make pensions better, influence policy, give outstanding value to our members, build a great place to work and secure our future as an authoritative, purpose-led and impactful organisation. We have a new name, new logo and new visual identity but, as the most trusted and authoritative voice of pensions, we will continue to do everything we can to help everyone get a better income in retirement.”
Emma Douglas, Chair, Pensions UK Board, said: “The world of pensions is changing fast, and we need to stay ahead as retirement saving plays a defining role for the UK. The sector will require bold thinking and strong leadership. Our policy work for the next five years will be based on our understanding of the world we are likely to see in the 2030s, from the experiences of members and retirees to the structure of the pensions market and the direction of public policy. We’re drawing on the latest trends, projections and evidence to set out not just what is changing, but what must be done in response.”
Download the full report.
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