The value of defined contribution (DC) pension assets in the UK is set to reach £1trn and overtake defined benefit (DB) scheme assets by 2031, figures published alongside the Pensions Commission's interim report have shown.

In an update that added underlying data for the report, the Department for Work and Pensions (DWP) estimated that DC scheme assets would increase from £771.8bn in 2026 to £1.03trn in 2031, and rise further to £1.24trn by 2035.

DC pension assets were forecast to overtake DB scheme assets in 2030, with DB pension assets shrinking from £1.17trn in 2026 to £923.5bn in 2030, before falling to £523.8bn in 2035.

While DC pension assets were set to rise, total private sector pension assets were forecast to decline from £1.94trn in 2026 to £1.76trn by 2035.

Insurtech company Lumera noted that, although DC scheme assets were growing, contribution levels from both employers and employees into DC pensions were typically lower than historic contribution rates into DB schemes.

This meant that the rise in DC assets would not fully offset the level of asset depletion being seen across mature DB schemes over the coming decade.

“These projections from DWP underline the speed of the current evolution taking place across the UK pensions market,” commented Lumera commercial director of data and dashboards, Maurice Titley.

“It highlights the scale of transformation that the DC market is currently undergoing and the challenge that lies ahead for providers. Millions more members are saving into DC pots at a time of rapid regulatory change, AI development and growing focus on outcomes.

“This sustained growth in the DC market is inevitably increasing demand for highly scalable, digital-first platforms capable of delivering better engagement, more efficient operations and improved retirement outcomes at scale.

“The pace of change now means operational resilience, clean data and modern technology are becoming increasingly central to how pension schemes compete, evolve and manage this transition over the next decade.”

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