• The emergence of 10-15 megafunds by 2035 will drive better outcomes and facilitate
    increase in private market allocations
  • A more value-focused system could boost retirement savings pots by up to 20%
    while unlocking up to £115 billion in GDP and supporting 330,000 jobs across the UK
    from infrastructure investment alone
  • Calls for clearer implementation of reforms, with a shift from cost to value,
    supported by a clear and consistent regulatory framework
  • Eight key principles set out how the industry and policymakers can deliver these
    outcomes in practice

The UK’s pensions system is entering a critical phase of transformation, as the focus shifts from shaping the Pension Schemes Act to delivering stronger outcomes for savers and the wider economy
via its implementation.

New research published today by Standard Life, in partnership with WPI Economics - 'From scale to impact: A blueprint for the future DC pensions market' , sets out how one of the Act’s critical initiatives, a move to fewer, larger defined contribution (DC) pension schemes with a greater focus on long-term value, can be successfully implemented through the adoption of eight key principles.

It highlights the potential benefits for savers and the UK economy with changes to investment
strategy helping people’s pension savings increase by up to 20% while supporting significant business and job creation across the UK.

A step change in outcomes for savers

The research finds that a more diversified investment approach, particularly through greater allocation to private market assets, could materially improve long-term returns for pension savers.

Achieving these outcomes will require a significant structural shift to a more consolidated pensions
market, with 10-15 large “megafunds” expected to emerge by 2035. Greater scale would enable
schemes to invest more effectively across a wider range of assets, particularly private markets, where allocations could rise from around 2-4% today to 15-30% during the growth phase in future default funds.

Under the proposed approach1:

  • Pension pots could increase by between 4% and 20% at retirement
  • An early-career saver could have up to £49,000 more in their pension pot
  • A mid-career saver could see up to £17,000 additional savings

Benefits are most pronounced when applied early in a saver’s working life but improvements are evident across all saver types and remain resilient across a wide range of market conditions.

Unlocking investment into the UK economy

Alongside improved outcomes for savers, the research highlights the potential for pensions to play a much greater role in financing UK growth.

By 2035, the DC pensions market is expected to reach up to £1.8 trillion in assets. Between £40 billion and £200 billion could be invested in UK private markets under the proposed approach, significantly higher than today.

This could support infrastructure investment generating up to £115 billion in GDP, that in turn would underpin 333,000 jobs, and increase investment in UK businesses, supporting thousands of SMEs.

From direction to delivery

With recent Government policy and regulation paving the way for radical pension scheme reform, the report sets out the principles necessary to facilitate a new era of value-focused retirement saving. How these changes are implemented will be critical to delivering the full benefits to savers and the economy.  

To support this, it sets out eight principles:

  1. Establishing a clear, consistent and outcome-focused regulatory framework
  2. Equal levels of protection for all members
  3. Shifting from a cost-focused to a value-focused approach, enabling investment across a wider range of assets, including private markets
  4. Ensuring intermediaries drive competition and value 
  5. Strengthening governance through highly skilled trustees
  6. Aligning pensions with wider economic and industrial strategy
  7. A system that supports all to save
  8. Supporting effective and sustainable access to retirement income

Together, these changes could help the pensions system deliver stronger outcomes for savers while supporting wider economic growth.

Our analysis shows that greater scale and more diversified investment strategies, particularly increased exposure to private markets, can deliver higher returns for savers while supporting infrastructure, businesses and economic growth.

The evidence points to a significant opportunity to improve outcomes but realising this will require coordinated action across the market and a regulatory framework focused on delivering higher net value for members.

- Joe Ahern, Director of Policy at WPI Economics

Addressing the retirement savings challenge

The research comes as concerns continue to grow about retirement adequacy in the UK, with millions of people not saving enough for later life.

Building on its previous review of UK pension adequacy, WPI Economics highlights the need to strengthen both contribution levels and investment strategies, noting that current approaches may be limiting the growth potential of pension savings.

The UK pensions system is at a critical juncture. While auto enrolment has transformed participation, too many people remain at risk of falling short in retirement.

The next phase must focus on how reforms are implemented in practice, ensuring that pension savings are translated into better outcomes through greater scale and a stronger emphasis on long-term value.

Getting this right is essential to improving financial security in retirement while also ensuring pensions can support long-term investment in the UK economy.

- Andy Briggs, Group CEO, Standard Life plc,

Enquiries

Notes to editors

Note 1: Saver Profiles:

Saver A
Early-career saver		 Saver B
Early-career saver with career break		 Saver C
Mid-career saver
 

21 years old in 2035, earning minimum wage

Starts saving in 2035 and works full-time until retirement at 68 years old.

21 years old in 2035, earning minimum wage

Starts saving in 2035 while working full-time, before taking a career break and returning to work part-time until retirement at 68 years old.

45 years old in 2035, earning median wage

Already has a modest pension pot, and continues saving post-2035 and working full-time until retirement at 68 years old.

Median outcome for pot size at retirement (net of fees, real terms, 2026 prices)

 

 

 

 

Research information: 

Blueprint developed through WPI analysis of current UK and international allocations, market participant targets and interviews with pensions sector and investment experts, leading employee benefit consultants (EBCs) and international frontrunners. 

Figures include both trust- and contract-based DC workplace pensions, with 75% of total AuM assumed to be in growth phase. Savers returns calculated using a Monte Carlo simulation, reporting percentile outcomes based on 20,000 simulations for each saver profile in Note 1. Outcomes compared to counterfactual of just 1.7% of growth phase AuM invested in private markets. Figures are net of fees and presented in real terms, using 2026 prices. 

Investment in infrastructure and real assets in 2035 is estimated to range from £15-60 billion, underpinning £25-115 billion in GDP and 70,000-330,000 jobs. Private equity and VC investment estimated between £17-80 billion, supporting up to 14,000 SME equity deals and 7-32 unicorns (privately-held start-up companies valued at over $1 billion). For more information please see page 37 of the report.

About WPI Economics:

We are an economics, data insights, policy and impact consultancy, but one that is a little different to many others. We draw on backgrounds in government and the private and charitable sectors to produce work designed to make a difference. We do not do research for research’s sake. We are committed to ensuring that everything we do has an impact - which is part of the reason why we recently became a verified B Corporation.

About Standard Life:

Standard Life is a retirement specialist focused entirely on retirement saving and income.

We are proud to manage around c£317bn in assets on behalf of our 12 million customers, and we champion the belief that everyone's journey to and through retirement can be better. 

With our focus entirely on retirement savings and income we want to be the business that people trust to guide their retirement journey, helping our customers achieve better outcomes and greater financial security in later life. 

As a FTSE 100-listed group we are using our size, expertise and influence to shape the world our customers will retire into, and are committed to helping three million customers by 2035, take action towards a better retirement. 

Standard Life is a responsible investor with a clear commitment to supporting a more sustainable future. The company has achieved its net zero goal across its emissions for 2025 and is working towards net zero investment portfolios by 2050 or sooner.

Standard Life is recognised as a leading employer, with long-standing accreditation as a Living Wage Employer, Living Pension Employer and Carer Positive Exemplary Employer and in 2025 became one of Britain’s Most Admired Companies in 2025.