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The Actuary The magazine of the Institute & Faculty of Actuaries

DC pension scheme membership increases by 400%

Membership of defined contribution (DC) pension schemes in the UK increased by 29% over the last year and by more than 400% since the start of 2010.

DC saving on the rise ©iStock
DC saving on the rise ©iStock

That is according to figures released today by The Pensions Regulator (TPR), which show that the number of people in DC schemes has risen to 12.6 million.

They also reveal that £5.4bn was put into these schemes in 2017, an increase of more than 21% compared to the previous year, with a total of £48bn now saved in DC pensions.

“The success of automatic enrolment has put DC schemes at the heart of pension saving in the UK,” TPR acting executive director for regulatory policy, analysis and advice, Anthony Raymond, said.

“For these new and existing savers we have a role to protect their benefits and so we are working hard to drive up standards of trusteeship.”

The data, published in TPR’s annual DC Trust report, also shows that 90% of people currently saving into a private sector pension are doing so into a DC scheme.

In addition, it was found that the average asset price per member has fallen as more people save, declining from £4,700 in 2016 to £3,900 in 2017.

Master trusts account for a major proportion of the increase in DC saving, with membership increasing from 270,000 at the start of 2012 to almost 10 million in 2017.

At the same time, the actual number of DC schemes continues to fall, reducing 52% from 4,560 in 2010 to 2,180, with Raymond saying that TPR welcomes the decline.

“We have been concerned about a tail of sub-standard schemes, and have been encouraging trustees who cannot or will not meet the standards we expect to consider consolidation,” he said.

“We are also implementing the Pension Schemes Act 2017, which requires master trusts to meet a clear set of standards in order to obtain authorisation from us to operate.”

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