This week in pensions, defined benefit (DB) schemes were again in the spotlight as updated funding figures revealed the growing impact of global economic uncertainty.

The aggregate surplus of DB pension schemes fell £17.2bn to £215.5bn as of the end of March 2025, according to the Pension Protection Fund's (PPF) 7800 Index.

Due to recent market volatility, total DB scheme assets fell by 3.3 per cent over the past month, from £1,124.1bn to £1,087.2bn.

In addition to this, analysis from Broadstone showed that while compensation for a typical DB pension transfer redress case continued to fall through Q1 2025, the recent market volatility could 'wipe out' these downward movements unless changes are seen.

Broader changes in the DB market are also being seen, as LCP said that unparalleled levels of competition in the buy-in market and upcoming government policy could "re-write the landscape" of DB pensions and increase the number of investment opportunities.

In addition to this, Isio's 2025 professional independent trustee survey highlighted the growing influence of trustees, revealing that the 10 largest professional trustee firms now manage over 2,400 pension schemes, representing almost half (43 per cent) of UK DB pension schemes (39 per cent in 2023).

However, despite the "huge concentration" of DB pension scheme assets, LCP warned that trustees' voices are 'rarely heard' in the corridors of power.

They said ministers regularly met with representatives of the pensions industry, asset managers, and insurance companies but rarely had face-to-face meetings with the trustees who decide how money is invested.

These comments were made amid growing anticipation for the second phase of the government's pensions review, which Hymans Robertson, head of pension policy innovation, Calum Cooper, highlighted as "an opportunity to make lasting changes to give people financial independence in later life for as long as they live".

Ahead of its release, the firm said the government could "unlock" billions of pounds from UK pensions, as its research suggested that a package of pension reforms could provide a £28.5bn annual boost for the Treasury, while employers could benefit by up to £14.2bn.

In addition to this, the UK Sustainable Investment and Finance Association (UKSIF) has urged the government to consider several "urgent" pension reforms as part of its ongoing pension review, arguing that "decisive" steps are needed to tackle current investment barriers.

Broader progress on the push for economic growth has also been seen, as government launched a consultation on plans to amend the regulations applying to alternative investment funds to make it simpler and cheaper for most asset managers to do business in the UK.

It was also a busy week on the technology front, with research from PensionBee revealing that nearly half (45 per cent) of over-65s either don't fully trust artificial intelligence (AI) or don't trust it to provide accurate financial guidance.

The research highlighted "stark" generational differences in attitudes towards AI, as this compared to 33 per cent of those under 65 and 27 per cent of 18-34-year-olds who shared the same concerns.

In terms of cyber security, RSM UK partner Stuart Leach said that pension scheme trustees should "double down" on efforts to protect data, assets, and members.

Leach's comments were made in response to a new Cyber Governance Code of Practice launched by the Department for Science, Innovation and Technology (DSIT) in partnership with the National Cyber Security Centre (NCSC).

However, there has been some progress in protecting savers online, as the Pensions Scams Action Group (PSAG) has upped its efforts to uncover fraudulent websites, using machine-learning technology and algorithms trained with real-world data to build predictive models and create a new tool to detect scam websites.

However, many savers are still at risk, as broader research this week revealed "significant" knowledge gaps among those approaching retirement.

The Institute for Fiscal Studies (IFS) found that just over four in 10 (42 per cent) individuals with a state pension age (SPA) between 66 and 67 know their SPA correctly within three months, while 42 per cent overestimate it, 12 per cent underestimate it, and 5 per cent claim not to know it at all.

Furthermore, research from My Pension Expert showed that over two-thirds (67 per cent) of employed UK adults with a workplace pension wish they had been taught about pensions earlier in life.

The research indicated that many people are uncertain about their financial futures due to a lack of understanding, with 53 per cent admitting they feel out of their depth regarding pensions and knowing how to save for retirement effectively.

On the climate front, the industry continued to recognise that it must do more to address environmental concerns.

The Pensions Regulator (TPR) said that small defined contribution (DC) schemes that do not take appropriate action to protect savers' retirements from climate risk should consider quitting the market.

In a positive move, the London Pensions Fund Authority (LPFA) has pledged to invest around £250m, or 3 per cent, of its £8bn fund value in environmental solutions assets to support its net-zero ambitions.

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