Private sector workplace defined contribution (DC) pension assets could rise from around £1.3trn today to nearly £2.2trn by 2046, representing an increase of almost £1trn, according to the Pensions Policy Institute (PPI).

Its latest DC Future Book, now in its 12th year, estimated there could be 14.9 million active members in DC workplace pension schemes in 20 years' time, 10.6 million of which would be in master trusts.

The report comes as the pensions industry awaits the second Pensions Commission’s recommendations to government on adequacy, fairness, and sustainability within the UK pensions system.

It estimated that pension savers currently aged 45-54 will have £63,000 in their DC pension pots at retirement, which is nearly 15 per cent less than those aged 35-44 and 10 per cent less than those aged 55-64.

The report also examined links between workplace and retail pension schemes, finding that around 4.7 million UK adults, equivalent to 9 per cent, held a non-workplace DC pension pot in accumulation as at May 2024.

Among those who consolidated pensions in the three years to May 2024, 35 per cent transferred savings into a non-workplace arrangement, although most consolidations were into current or former workplace pension schemes.

The PPI also said innovation in the retail pensions market, including the use of artificial intelligence, could support communications, administration, member support and potentially reduce operational costs.

PPI policy researcher and lead author of the report, Shantel Okello, commented: “The DC market is evolving, but growth and greater choice do not necessarily mean better retirement outcomes.

“Our modelling highlights differences in projected pension pots between age groups, while this year’s report explores how workplace and retail pensions connect and what this means for savers’ choices, costs, and support.”

This year’s report was sponsored by State Street Investment Management and Scottish Widows.

Commenting on the findings, State Street Investment Management head of European institutional strategy, Olivia Kennedy, said that while the UK’s pension system has seen massive, positive evolution over the last decade, with automatic enrolment bringing millions more people into long-term saving, the work is not over.

“There are still significant gaps, with contribution rates remaining low, modest pension pot sizes, and increasingly complex retirement decisions,” she said.

Scottish Widows managing director, pensions and investments, Graeme Bold, added that the report's expanded focus on retail pensions reflects the increasingly complex way people save for retirement and manage their finances.

“A holistic and joined up approach is therefore essential across the whole pensions landscape, as well as broader personal finance, to help UK savers get the best possible outcomes,” he said.

Other findings in the report showed that the median DC pension pot stood at £15,400 in 2025, despite the sector's growing asset base.

The report also found that employees ineligible for automatic enrolment outnumbered eligible employees for a second consecutive year, reaching 12 million compared with 11.45 million in May 2026.

Lower earners were also more likely to contribute at the automatic enrolment minimum level, while FCA data showed that self-invested personal pension (SIPP) assets under administration totalled around £567bn in 2024.

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