More than three-quarters (76 per cent) of pensions industry professionals are assessing, exploring or expect to explore collective defined contribution (CDC) within the next three years, although a lack of confidence remains a key barrier to adoption, research from Gallagher has revealed.

The Gallagher CDC Report 2026, based on a survey of 250 UK employers, trustees and pensions professionals, found that while appetite for CDC was growing, just over half (52 per cent) of respondents would feel comfortable being an early adopter.

Gallagher suggested that this gap between interest and commitment was a defining feature of the current CDC market, with organisations remaining at different stages of consideration.

The research identified clearer regulatory guidance (39 per cent), proven results from early adopters (38 per cent) and positive stakeholder feedback (37 per cent) as the three leading factors that would give organisations greater confidence to adopt CDC.

However, Gallagher noted that regulatory guidance had progressed significantly over the past 12 months and was unlikely to remain a barrier for much longer.

Instead, it suggested that the focus would increasingly shift towards demonstrating successful outcomes from early adopters and securing support from wider stakeholders, including trade unions.

The findings also revealed a preference for multi-employer CDC arrangements, with 53 per cent of respondents indicating that they would be most likely to consider a multi-employer or master trust model.

Despite this, single-employer CDC remained relatively popular, with 34 per cent of respondents saying they would be most likely to consider this type of arrangement.

Meanwhile, 86 per cent said they would find a sector-wide CDC arrangement attractive, suggesting strong demand for scalable and accessible models.

Gallagher Benefits & HR Consulting Division CEO, David Piltz, warned that the growing number of savers approaching retirement after spending most or all of their careers in DC schemes highlighted the need to consider alternative retirement income solutions.

"Over the next five to 10 years, we will start to see more people reaching retirement after spending most, or all, of their working lives in DC arrangements," he noted.

"Many of those savers may be disappointed by the income their pension savings provide."

Looking ahead, Gallagher argued that employers and trustees should first determine whether CDC could address specific challenges in their pension arrangements, rather than adopting it simply because of growing industry interest.

The consultancy also stressed that securing stakeholder support would be essential to translating interest into practical adoption, particularly where changes would affect employees' retirement expectations.

---