Industry experts are expecting a busy year for the pensions industry in 2025, predicting increased demand in the pension risk transfer market, growing momentum around pensions dashboards, and key changes to the advice/guidance boundary.

Hymans Robertston head of DB scheme actuary services, Laura McLaren, said that the pensions market is set for further change in 2025.

"Amidst a significant pensions review, there’s a packed agenda of proposals and consultations, and an upcoming Pension Schemes Bill," she continued, noting that most of the initial focus has been on defined contribution (DC) and local government pension schemes (LGPS).

However, the defined benefit (DB) pension risk transfer market is expected to have another "bumper" year in 2025, with analysis from LCP suggesting that the number of transactions will surpass 300 for the first time.

Isio also said that it expects the bulk annuity market to remain healthy in 2025, suggesting that further insurers entering the market will add even more deal capacity, which should again increase transaction volumes and maintain attractive pricing for pensions schemes in the year ahead.

And while large transactions often dominate the market’s narrative, Isio highlighted the activity seen in 2024 as demonstration that schemes of all sizes can achieve great outcomes.

“This year has shown us the adaptability and continued buoyancy of the bulk annuity market. The addition of new insurers has created more competition for deals among insurers and greater opportunities for schemes of all sizes," Isio director, Karen Gainsford, said.

“While large transactions often command the most attention, small and mid-sized schemes have also benefited significantly from favorable pricing conditions.

"But pricing alone is not enough and, as the only consultancy to have led transactions with every active bulk annuity insurer, we have a unique view of the range of price and non-price offerings available.

"Trustees are increasingly focused on non-pricing factors, and it has never been more important for insurers to meet a scheme’s unique needs.”

Alternative de-risking options could also be in the spotlight, as RSM UK head of pensions, Ian Bell, said that he expects 2025 to bring growing interest in superfunds increase, with more players entering the market now that the Clara superfund has demonstrated there is demand for a further derisking option.

Broader defined benefit (DB) changes are also on the industry wish list for this year, as McLaren said that it was disappointing not to have more clarity on the possibility of greater DB surplus sharing that appeared in the 2024 Options for DB schemes consultation.

“Top of my wish list for 2025 is that we see the new government and regulators progress with thinking in relation to sharing surplus assets," she stated.

"With the right guidance and safeguards, this would help to open up the prospect of more DB schemes running-on for longer and in ways that can benefit members, sponsors and the wider UK economy.

"Whilst options are available to some schemes, the ability to use surplus does not exist for all nor does it permit things like one off lump sum discretionary increases.

"A lack of clarity over what will be possible risks stifling decision making and purposeful implementation. With many more schemes in the £1.4trn of UK DB pensions now strongly funded, it would be disappointing if the topic of access to DB surplus lost momentum at this important juncture.”

Dashboards are expected to be another area of focus in 2025, as, after a year of momentum and key updates, pension schemes will begin to face the first connection deadlines, with larger schemes required to connect from April 2025.

"Dashboards will dominate trustee agendas in the year ahead, with 2025 connection deadlines fast approaching," Trafalgar House client relationship manager, Callum Westney, said.

"Trustees must make decisions and take action now to ensure data readiness and avoid being caught out by the scale of the work involved."

Bell agreed that pensions dashboards could be a "game changer" for pensions, improving pensions literacy and encouraging more people to save greater amounts at an earlier age.

However, he stressed that, as more people become aware of what pension savings they have, how they are performing and what income they might expect at retirement, public pressure on the government to do more to support pensions savings will likely increase.

"People are also more likely to actively seek advice on how best to invest to get the most out of their retirement savings and how they can best use their pensions pot at retirement to give them an income for life," he added.

But Trafalgar House technical and communications manager, Karla Bradstock, said that 2025 could mark a "turning point" for retirement savers as the Financial Conduct Authority's (FCA) proposals on targeted pension support take shape.

"Trustees and providers must prepare for a world where savers have more help at their fingertips, bridging the gap between advice and action," she stated.

Broader technology and AI advances are also expected to help, as Bell says that these will likely come to the fore for pension providers in 2025, streamlining processes and reducing administrative tasks, freeing up employees to focus on other tasks.

"AI may support consumers in making decisions about what to do with their pension pots, but at the moment this is no substitute for qualified human financial advice, and the two will work together for the foreseeable future," he continued.

However, he warned that the increased use of digital tools and customer data comes increased risk of cyber threats and scams.

"Scammers could make use of government initiatives such as pensions dashboards as an opportunity to trick consumers out of their pensions savings," he cautioned.

"While consumers are continuing to wise up to the types of tricks scammers use and are much more sceptical of unsolicited offers to improve returns by transferring their pensions savings, there is still work to be done to raise awareness of this ever-evolving threat."

This was echoed by Trafalgar House head of IT, Stephen Wright, who said that while cybersecurity has climbed the agenda, trustees can’t assume it’s mission accomplished.

"It's not ‘set and forget," he stated. "Trustees must stay on high alert in 2025 to keep their schemes protected."

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