Master trusts are dominating the defined contribution (DC) pensions landscape as consolidation continues, with the number of UK DC schemes falling by 15 per cent to 790 in 2025, analysis from The Pensions Regulator (TPR) has shown.

The reduction in DC schemes last year was consistent with 2024’s decline, when the number of DC schemes fell to fewer than 1,000 for the first time.

Almost all (92 per cent) DC scheme members were in master trusts in 2025, representing 30.1 million members.

DC scheme membership overall increased by 7 per cent year-on-year to 32.8 million in 2025.

TPR called on DC pension trustees to review whether their scheme presented value for savers, as the market shifted towards fewer, larger schemes.

Its DC landscape report also showed that DC scheme assets continued to grow, rising from £205bn in 2024 to £249bn last year, an increase of 22 per cent.

Master trusts held £208bn, or 83 per cent, of total DC assets last year.

“People rightly expect to receive value from their hard-earned retirement savings,” commented TPR executive director, strategy, policy and analysis, Richard Knox.

“As we move towards a market of fewer larger schemes, master trusts now dominate. We believe that larger schemes are better placed to deliver value for money, including stronger investment returns and better service.

“The current Pension Schemes Bill will speed up market dynamics. In the new pensions world, we urge pension trustees of smaller schemes, in particular, to review their scheme today.

“Those that cannot match the stronger performers should consolidate out of the market and transfer savers to a better value scheme.”

All the figures included in TPRs report refer to DC schemes with 12 or more members, and the scheme and membership numbers include hybrid schemes while the asset figures exclude hybrid schemes.

Commenting on the findings, Broadstone head of DC proposition, Kelly Parsons, said: “The latest data from TPR emphasises the rapid change undergoing the UK’s DC market.

“The extent of the reduction in scheme numbers, combined with rising assets and member volumes, highlights how quickly provision is concentrating into a smaller pool of providers. Master trusts, in particular, continue to strengthen their position as the primary vehicle for workplace DC saving.

“In this environment, sub-scale schemes may face increasing pressure to consider strategic consolidation or partnerships to remain sustainable and meet member expectations.

“At the same time, the rising number of deferred members highlights a more complex membership profile, with individuals holding multiple pots.

"Schemes will need to prioritise effective engagement, data-driven insights, and member support to deliver meaningful retirement outcomes.

"For trustees and employers, the data serves as a timely reminder to review whether their current DC arrangements remain fit for purpose in a market that is becoming more concentrated, more competitive, and increasingly focused on delivering demonstrable value for members."

---