The 2025/26 edition of Aon’s Global Pension Risk Survey – which is published every two years - charts the actions, intentions and concerns of UK DB pension schemes. The UK survey had 230 responses, covering both DB and defined contribution (DC) schemes, from the relatively small (less than £100 million) to the very large (over £10 billion). This year, 85 percent of respondents were from the private sector and 15 percent from the public sector. Trustees, including professional trustees, accounted for 58 percent of the survey responses, with 31 percent of responses coming from pensions managers.
Relative risks
The risks faced by UK DB pension schemes have become increasingly complex, highlighting a greater need for careful prioritisation of risk and opportunities. However, the relative severity of the risks that could threaten schemes’ ability to pay member benefits as they fall due, have changed since the last survey. The results revealed that while investment returns remain the top concern for UK DB schemes, regulatory risk now ranks second, up from fourth in 2023. Data and benefit risk emerged as a key priority, ranking above traditional concerns such as interest rate and inflation risk. Concerns about longevity and covenant risk remain unchanged, ranking in third and seventh positions respectively, while liquidity risks have slipped to the bottom of the list.
Matthew Arends, partner and head of UK Retirement Policy at Aon, said: “Since we started this survey 20 years ago, the UK pensions sector has weathered many storms from the financial crisis and COVID-19 to the 2022 mini-Budget - but DB schemes are now in a stronger position than ever. However, those running pension schemes continue to face uncertainty as they grapple with new forms of volatility. While the macro-economic environment has remained challenging, the focus on pensions by consecutive governments has also led to increasing volumes of regulatory change.
“It is therefore not surprising to see regulatory risk climbing high on the agenda and continuing to preoccupy both sponsors and trustees. The survey results underscore the volume of new rules and regulations already required of schemes, but also that regulatory change is expected to continue. For example, the changes from the Pension Scheme Bill, announced in June, occurred after we received the survey responses - and they are unlikely to be the last major regulatory development the industry will face over the next few years.”
Alastair McIntosh, partner at Aon, said: “Investment returns remain the top concern for DB schemes, whether they are needed to bridge deficits or to maintain strong funding positions for securing members’ retirement benefits. However, this iteration of the survey saw data and benefit risk come to prominence. This is almost certainly driven by trustees increasingly recognising the importance of data quality and benefit accuracy before they can undertake key activities such as GMP equalisation exercises, dashboard-readiness or bulk annuity transactions.
“But it was surprising, given their importance and influence, to see interest rates and inflation significantly drop down the risk list. While the turmoil of the September 2022 mini-Budget is still fresh in many memories, improvements in funding levels have clearly shifted priorities. In a similar vein, as many schemes look to prepare for a future risk settlement transaction, liquidity is also less of a preoccupation for trustees.”
“Looking ahead, it will be interesting to observe how schemes’ decision-makers prioritise time and resources to respond to the ever changing macro and regulatory environments. It will also be interesting to see the development of artificial intelligence (AI) in pensions. Perhaps surprisingly, no respondents raised AI as a risk for their pension scheme - but we expect it to be a key topic to return to in future Global Pension Risk Surveys.”
For more information, Aon’s Global Pension Risk Survey 2025/26 is available here.
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