The number of UK businesses with a master trust as their main defined contribution (DC) pension scheme is set to more than double over the next three years.
After surveying 190 organisations, Willis Towers Watson (WLTW) found that one-quarter expect to have a master trust as their main scheme in 2021, up from just 12% today.
Almost three-quarters plan to review the way they deliver their pension within two years, or have already done so, with boosting communication and engagement the main reason cited.
David Bird, head of proposition development at WLTW's DC master trust LifeSight, said growing interest in master trusts should come as no surprise given the market's rapid growth in recent years.
"However, we do anticipate more consolidation now that the Pension Schemes Act is open," he continued.
"This is good news for prospective employers and members, as those master trusts left standing will be able to achieve the scale necessary to improve their offering to members."
The research suggests that the shift towards master trusts is partly driven by schemes moving away single-employer trusts and group personal pension (GPP) contract-based schemes.
The number opting for single employer-trusts is expected to decline from 34% to 23% in the coming years, while uptake of GPP contract-based schemes is set to drop from 50% to 47%.
Some 68% of the survey respondents said better communication and engagement was the main reason for reviewing their pension scheme delivery, and 60% think it could improve outcomes.
Under a third said integrating pensions into a wider financial well-being programme was a driver for them.
The costs involved in switching were cited as the main barrier to change, followed by the time required, and a lack of clear benefits compared to the current provision.
"For those organisations looking to switch to a master trust, focus should be on the strength and quality of governance and management of those trusts under consideration," Bird added.