Global pension assets rose by almost 10 per cent in 2025 to reach a record $68.3trn, driven by strong market performance and the continued expansion of defined contribution (DC) savings, according to research from the Thinking Ahead Institute (TAI).

The TAI’s annual Global Pension Assets Study found that pension assets across the world’s 22 largest markets increased by 9.6 per cent year-on-year, creating around $6trn of additional pension wealth.

While UK pension assets reached $3.2trn in 2025, growth averaged just 1.4 per cent per year over the past decade in US dollar terms - the weakest compound annual growth rate of all 22 major markets, except Brazil.

As a result, the UK fell from the second-largest pensions market in 2015 to fourth place in 2025.

TAI argued the UK’s relative decline reflected a structural transition within its pension system, as defined benefit (DB) schemes matured, paid out benefits and de-risked, while DC provision continued to expand.

Indeed, DC assets now account for around 40 per cent of total UK pension assets, up from 18 per cent in 2020.

The US remained the largest pensions market, accounting for two-thirds of total assets, while Canada overtook Japan for the first time to become the second-largest market, posting 12 per cent growth over the year.

Across the seven largest pension markets - Australia, Canada, Japan, the Netherlands, Switzerland, the UK and the US - DC assets now represent 63 per cent of total pension assets.

Australia and the US remained the most DC-heavy markets, with DC accounting for approximately 90 per cent and 72 per cent of assets, respectively, while Canada followed at 44 per cent.

Over the past decade, DC assets across the largest markets grew at an average rate of 9.4 per cent per year, compared with 2.9 per cent annual growth for DB assets.

The study also highlighted a long-term shift in asset allocation.

Over the past 20 years, equity exposure across the largest markets has fallen by nine percentage points to 48 per cent of total assets, while allocations to bonds and other asset classes, including alternatives, have increased to 31 per cent and 19 per cent respectively.

TAI also noted that aggregate asset allocation now more closely resembled patterns seen 15 years ago.

Commenting on the findings, TAI director, Jessica Gao, noted that 2025 marked a broad-based recovery across global markets, supported by strong equity performance and gains in fixed income following global interest rate cuts.

Looking ahead, Gao predicted that policy decisions, technological innovation and shifting global dynamics were likely to shape pension investment outcomes in 2026, with fiscal support and artificial intelligence-related investment expected to remain key drivers of growth.

She also argued that greater market uncertainty and interdependence were increasing the importance of a total portfolio approach to investment decision-making.

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