The UK’s professional trustee market is entering a new phase of maturity, with growth slowing but concentration intensifying, according to LCP’s fifth annual 'Sole Mates' survey, which found that four firms now oversee 80 per cent of £1.1trn of defined benefit (DB) assets.

The report found that the market recorded the slowest annual growth in five years, reflecting a shrinking pool of defined benefit (DB) schemes as buy-outs and wind-ups accelerate.

While 53 per cent of UK DB schemes now have a professional trustee in place - up from 12 per cent in 2021 - the year-on-year increase was just 1 per cent.

In addition, hiring across professional trustee firms fell by 30 per cent over the past year, with providers pivoting from expansion to consolidation.

LCP noted that firms are increasingly focusing on succession planning, governance frameworks and specialist expertise, rather than adding headcount.

The report also found that professional trustee firms now oversee more than £1.1trn of DB assets, but 80 per cent of this (£880bn) is concentrated in just four providers: LawDeb, IGG, Capital Cranfield and BESTrustees.

LCP has previously warned that such a concentration of appointments could increase concerns over decision-making being in the hands of a small pool.

However, the report showed that these firms represent only 42 per cent of the number of appointments, with LCP claiming that “new voices are starting to make themselves heard”.

It revealed that mid-sized players and new entrants, such as Falcon Trustees and Aretas, are gradually increasing their share, although over half of the 226 new mandates since April 2024 still went to four firms.

LCP partner and head of strategic pensions relationships, Nathalie Sims, said that growth in the market hasn’t stopped, but it’s "changing."

"Consolidation and new regulation mean the next phase of the professional trustee journey may look very different from the last,” she noted.

Indeed, consolidation is expected to be the defining theme of the next five years, aligning with The Pensions Regulator’s (TPR) strategic focus and the government’s push for scale.

TPR chief executive, Nausicaa Delfas, said: “We have already extended our market oversight approach to the largest professional trustee firms. We expect professional trustee appointments to have followed a robust process, as trusteeship moves towards adhering to more conventional corporate governance standards.”

Meanwhile, the survey also revealed that 30 per cent of new appointments went straight to a sole trustee model, with Professional Corporate Sole Trusteeship (PCST) now covering a quarter of schemes - more than double the level seen in 2021.

“The fact that we’re seeing more and more PCST appointments on schemes over £1bn shows a real shift in how the model is being viewed,” said LCP partner and head of sole trusteeship, Holly McArthur.

“It’s no longer seen as just a solution for smaller or less complex schemes - with the right governance in place, PCST can deliver high-quality, strategic oversight at scale.”

However, Association of Member Nominated Trustees (AMNT) co-chair, Maggie Rodgers, warned that while sole trusteeship is a growing part of the market, it has the potential to disrupt the governance balance by weakening the focus on member interests.

"We welcome TPR’s extension of oversight into controls and governance," she added.

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