The number of non-hybrid and micro schemes in the UK has decreased by 11% over the last year, according to the latest occupational defined contribution (DC) landscape report from The Pensions Regulator (TPR).

Since 2012, the number of non-hybrid (schemes, including master trusts, with 12 or more members) and micro schemes (schemes with two to 11 members), declined by 70% (from 3,660 to 1,080).

This reduction in schemes, according to TPR is solely driven by schemes with fewer than 5,000 memberships. TPR added that master trusts continue to provide for the majority of DC members, with 84% of DC or hybrid scheme membership now within a master trust.


Scheme membership has meanwhile grown by more than 12 times since the beginning of 2012, from 2.3 million to 28.8 million. In 2023, scheme membership increased by 11%, compared to 11% in 2022.

TPR’s report showed that there are 35 authorised master trusts, accounting for 26.1 million DC memberships, including hybrid schemes, and over £122.9bn in assets, excluding hybrid schemes.

Master trusts account for over 90% of non-micro memberships and 78% of assets.


Asset values across DC stood at £158.3bn in 2023, an increase of £15.3bn or 11% since last year, and have grown by more than six times since the beginning of 2012, according to TPR’s report.

The report added that there had been a little (1%) growth in assets per member in 2023. This, TPR said, is down from an annual growth of 10% to 20% in assets per member in the previous three years.

TPR pointed out that investment markets were volatile in 2022, impacting scheme returns received in 2023 and resulting in a wide dispersion of returns dependent on the date of scheme submissions.

Tim Box, principal in LCP’s DC research team, said that those figures show the continued importance of automatic enrolment in providing retirement security for the UK workforce, however, reforms to extend the scope of auto-enrolment – first proposed in a 2017 review by the Department for Work and Pensions (DWP) – are now “long overdue” and are “a key step” to improving DC pot sizes.

Box said: “TPR’s figures show that the occupational DC market continues to consolidate, with continuous year-on-year reductions in the total number of schemes. This suggests that the government does not need to ’force’ consolidation of schemes any further.”

The figures also show, he said, the large number of small pension pots across the pensions landscape, with an average pot size across all memberships of under £6,000.

“This highlights the urgent need to address the issue of fragmented pension rights scattered across multiple pension schemes – another issue where no practical action has been taken to tackle a longstanding problem,” Box added.

“The government does not need to ’force’ consolidation of schemes any further”

Tim Box, principal at LCP

He said the lack of progress on average pot sizes and the growing number of small pots was a sign of a “pressing need to address fundamental problems with DC pension saving”.

Richard Birkin, head of DC pensions at Isio, added that the rise in DC membership across the board should be “applauded” especially when cost-of-living could “easily have reversed this positive trend and seen people cut back on pension saving”. 

“There are interesting discrepancies between different types of scheme, with the transition from own-trust to master trusts, and the uptake of the largest master trusts, not happening as fast as we might have expected, or at the pace the government wants to see,” he said.

He added: ”Over time we expect to see a bigger shift to larger master trusts as the DC industry consolidates. But the more significant trend is the growth in average pot size, a result of increasing contributions and investment returns, but which can also naturally be expected as the DC market matures. As more people who rely more heavily on DC savings approach retirement, providing the right support and decumulation solutions will be one of the biggest challenges for the pensions and investments industries to overcome.”

Birkin said that to date, the focus has been on the growth phase of pension saving, and the quality and choice of offerings for people transitioning to decumulation hasn’t been good enough. Innovation that delivers better products, strategies and member support is desperately needed.

He added that for DC schemes, one of the biggest challenges going forward will be getting the investment mix right by focusing on member outcomes, sustainability and the integration of various initiatives and reforms, with the evolution of the default strategy a continuous priority.

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