Ian Bell, head of pensions at RSM UK, comments: “Technological advances will transform the UK pensions industry in 2026, achieving greater transparency, efficiency, and member engagement. The launch of pensions dashboards will be a major milestone, allowing individuals to view all their pension entitlements in one place and reconnect with lost pots. The need for better data quality to ensure accuracy will accelerate. Artificial intelligence and automation will play a central role in administration, enabling personalised retirement planning, fraud detection, and streamlined compliance processes.
“Trustees and sponsors will increasingly use AI-driven analytics for investment strategy and risk management, while chatbots and virtual assistants will enhance member communication. Cloud-based platforms will become standard, offering scalability and integration with dashboards and regulatory systems. As the use of technology accelerates, cybersecurity will continue to be a top priority to protect sensitive data. Member experience will also evolve, with mobile-first interfaces, interactive planning tools, and self-service options becoming expected as part of engagement.
“Overall, technology will shift pensions from paper-heavy, opaque processes to user-centric systems, giving providers who invest early in AI, dashboards, and digital platforms a competitive edge.”
Recognised need for better AI governance
“The need for better AI governance in UK pensions will be increasingly recognised, embedding the government’s five principles of safety, transparency, fairness, accountability and contestability. Trustees and providers will need to be able to demonstrate that AI-enabled processes deliver fair, explainable and robust outcomes with clear human oversight.
“The pensions dashboards programme will make data quality and governance critical. Trustees will need to introduce and monitor data improvement plans, as high-quality data increasingly underpins safe AI use in administration and member interactions.
“Administration firms will need to maintain model inventories and bias testing for member-impacting decisions. Trustees will need to increase their awareness of the use of AI and the impact on member experience. Good governance will include board accountability, documented AI policies, robust data lineage, vendor oversight, and participation in supervised testing environments.
“Overall, 2026 will be about proving compliance – responsible AI deployment, dashboards readiness, and transparent member outcomes – within existing regulatory expectations.”
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“In 2026, UK pension megafunds will accelerate as government reforms drive consolidation for both defined contribution (DC) and defined benefit (DB) schemes. Local Government Pension Scheme (LGPS) assets - worth nearly £400 billion - will be pooled into six FCA-regulated asset pools by March 2026, creating significant scale and governance efficiencies. Further entrants into the DB superfund market are expected to follow the example and provide competition to Clara, the first superfund provider.
“For DC schemes, master trusts and multi-employer arrangements will embark on their journey to at least one default fund of £25 billion by 2030 (or £10 billion with a plan to reach £25 billion by 2035). This consolidation will start to unlock access to private markets, infrastructure, and real assets, historically unavailable to smaller schemes. Under the Mansion House Accord, DC providers are expected to allocate 10% of default funds to private markets, including 5% in UK assets, by 2030 - potentially channelling £50 billion into housing, infrastructure, and growth businesses. We will also see increasing interest in Collective Defined Contribution (CDC) arrangements.
“Overall, 2026 marks a pivotal year for building fewer, larger, and more influential pension funds, shaping the UK pensions industry for the future.”
A record year for insurance derisking
“The UK pension insurance de-risking market is set for another record-breaking year in 2026, with bulk annuity volumes forecast to exceed £60 billion, driven by strong funding positions and accelerating endgame strategies among defined benefit schemes. Higher interest rates combined with good investment returns have made buy-ins and buy-outs more affordable, prompting many schemes to move toward full risk transfer.
“Fierce competition among insurers is expected to keep pricing attractive, while new entrants and streamlined solutions will improve access for smaller schemes. Capacity will be bolstered by strategic partnerships between insurers and global asset managers, enabling greater investment in private credit and infrastructure assets. Funded reinsurance and alternative capital structures will remain critical for managing risk and expanding capacity.
“We anticipate 2026 will mark a pivotal year for pension de-risking, characterised by scale, innovation, and competitive pricing, as schemes seek security, and insurers race to secure assets for sustainable growth”
Pensions Commission shapes the future
“The Pensions Commission’s initial findings, expected in 2026, will likely identify the need for significant reforms to improve adequacy, fairness, and sustainability in the UK pension system. Key recommendations are expected to include expanding auto-enrolment by lowering the minimum age from 22 to 18, and removing the lower earnings limit, so contributions start from the first pound earned.
“The Commission may also explore mechanisms to include the self-employed in workplace pension saving, potentially through tax or National Insurance systems. Contribution adequacy will be a major focus, with proposals to increase minimum auto-enrolment rates from the current 8% towards 12% over time, supported by phased implementation to avoid affordability shocks for employees and employers.
“Addressing inequalities such as the gender pensions gap and disparities among part-time workers and ethnic minorities will be central, alongside measures to improve outcomes for those with fragmented careers. The report is expected to review the sustainability of the State Pension, including the triple lock and future State Pension Age changes, balancing affordability with fairness. Other recommendations may include improving decumulation options for DC savers, introducing default retirement income pathways, and expanding access to financial guidance.
“Overall, the Commission aims to create a more inclusive, adequate, and resilient pension system for future generations.”
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