The defined contribution (DC) market has continued to “radically reshape” towards fewer, larger pension scheme, data from The Pensions Regulator (TPR) has suggested, with the number of DC schemes falling below 1,000 for the first time in 2024.

TPR’s latest report on the DC landscape showed that the number of DC schemes fell by 15 per cent in 2024 to 920, largely due to a drop in the number of smaller schemes (fewer than 5,000 memberships).

Despite the fall in the number of schemes, TPR found that members in DC schemes increased 6 per cent, rising from 28.8 million members in 2023 to 30.6 million members in 2024.

In particular, TPR found that while active members remained at 11.1 million in 2024, deferred members increased by 10 per cent from 17.7 million to 19.5 million.

DC scheme assets also rose by 25 per cent, increasing from £164bn in 2023 to £205bn in 2024, which translated into a 17 per cent increase in assets per member, from £6,000 in 2023 to £7,000 in 2024.

According to TPR, this growth in scheme assets was driven by a combination of contributions and investment returns.

Master trusts continued to provide for the majority of DC members, holding 28 million memberships (91 per cent of DC and hybrid schemes) and £166bn in assets, which is equal to 81 per cent of all DC scheme assets.

Commenting on the findings, TPR chief executive, Nausicaa Delfas, said: “Our DC landscape report is further evidence of the evolution towards a pensions market of fewer, larger pension schemes, which we believe are better placed to deliver for savers and drive growth in savers’ interests.

“Value for money should be the guiding principle that runs through the DC system and where schemes cannot compete with the very best, they should consolidate and exit the market.”

Broadstone head of DC workplace savings, Damon Hopkins, also highlighted the findings as demonstration of a "positive trend", with rising contributions, investment returns, and scheme memberships.

However, Hopkins warned that, as more individuals rely on DC savings for retirement, the focus must remain firmly on ensuring members have the right support and decumulation options.

"In 2025, scheme trustees and employers must build on the progress made over the past year, strengthening pension engagement and financial education to emphasise the value of early contributions and support members on their journey to retirement," he stated.

"At the same time, schemes must refine their investment approaches, balancing sustainability, regulatory developments, and member outcomes while continuously evolving default strategies to secure better long-term results.”

This was echoed by Hargreaves Lansdown head of workplace saving analysis, Clare Stinton, who said that "while the news is promising, there's still work to be done", with recent research suggesting that just over a third 36.4 per cent of households are on track for a moderate retirement.

"This does raise further questions about the long-term adequacy of auto-enrolment contribution levels in helping people build a resilient retirement – or going one better, helping people achieve their dream retirement," Stinton stated.

"Other reforms should include looking at how employers could be incentivised to contribute more to their employee’s pensions – particularly for employees who are willing to increase their own savings.

"Big continues to be beautiful with the market gravitating toward larger providers, with a significant decline in micro schemes. Membership in schemes with over 5,000 participants has soared from 1.6 million in 2011 to 30.2 million in 2024.

"This consolidation reflects a shift towards scaling operations and reducing costs, especially after the FCA emphasised the need for member-centric schemes that prioritise the long-term interests of their members through a proposed value-for-money framework.”

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