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- New modelling indicates that workplace pension savers could retire with pension pots up to 20% larger under a more value-focused investment approach.
- Early-career savers could have up to £49,000 more at retirement, while an early-career saver taking a break could have up to £30,000 more and a mid-career saver up to £17,000 more, based on the modelling assumptions.
- The findings show why investment strategy should be considered alongside contribution levels when addressing the UK’s retirement adequacy challenge.
New research from Standard Life and WPI Economics suggests that reforms designed to support greater scale in the workplace pensions market, together with a stronger focus on long-term value, could help improve retirement outcomes. Across three representative saver profiles modelled, pension pots were between 4% and 20% larger at retirement under the proposed investment approach, with the highest uplift modelled for an early-career saver who takes a career break and later returns to work part-time.
The report, From Scale to Impact: A Blueprint for the Future DC Pensions Market, examines how the UK defined contribution (DC) pensions market could evolve over the next decade as consolidation, the Value for Money framework and wider pension reforms reshape workplace pension investment.
While much of the debate about retirement adequacy focuses on contribution levels, the research suggests that investment strategy could also make a meaningful difference. In the modelling, pension pots were between 4% and 20% larger at retirement under a more diversified investment approach that included greater exposure to private market assets.
For an early-career saver entering the workforce in 2035 and working full time, this could mean between £21,000 and £49,000 more at retirement. An early-career saver who takes a break before returning to work part time could have between £12,000 and £30,000 more, while a mid-career saver could have between £8,000 and £17,000 more. The potential benefit was greatest when the approach was applied earlier in the savings journey, giving returns more time to compound.
The modelling tested three representative saver profiles: an early-career saver working full-time; an early-career saver taking a career break before returning part-time; and a mid-career saver who had already built a modest pension pot1. Each profile used assumptions about age, earnings, salary growth and pension contributions. WPI Economics ran 20,000 market-performance simulations for each profile to illustrate a range of potential outcomes.
The proposed investment blueprint assumed that 15% to 30% of growth-phase assets were invested in private markets. Outcomes were compared with a counterfactual based on current DC market allocations, which assumed that 1.7% of growth-phase assets were invested in private markets.
Median outcome for pot size at retirement
(net of fees, real terms, 2026 prices)
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The findings come amid continuing concern about retirement adequacy in the UK. The report notes that millions of people are not currently saving enough for later life and argues that improving investment outcomes should sit alongside efforts to increase pension saving.
Jenny Holt
The pensions industry is rightly focused on helping more people build adequate retirement savings. Increasing participation and contribution levels will remain critically important, but we must also consider how effectively those savings are invested over the long term.
“The reforms under way are expected to create a smaller number of larger pension schemes with greater ability to invest across a wider range of assets. Combined with a stronger focus on long-term value, this could help improve retirement outcomes for millions of savers.
“The debate about retirement adequacy should not only be about how much people save. It should also consider how effectively those savings work for people throughout their careers.”
The report suggests that, by 2035, the workplace DC market could be dominated by 10 to 15 large pension schemes. It argues that greater scale could support broader diversification and increased investment in private markets, subject to appropriate governance, risk management and value for members. A shift from a cost-focused approach to a value-focused framework could also help schemes pursue stronger long-term, risk-adjusted returns for savers.
Joe Ahern
The UK faces a significant retirement adequacy challenge, and there is no single solution. Improving investment outcomes will not remove the need for higher pension saving, but our analysis suggests it could make a meaningful contribution.
Greater diversification and access to a broader range of investment opportunities can benefit savers over the long term. As the pensions market evolves, reforms must remain focused on delivering higher net value for members.
Media enquiries
For further information, photos, video content or interviews, contact:
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Louise Bryans
Public Relations Manager, Workplace & AdviserTelephone07974 063067
Emaillouise_bryans@standardlife.com
Notes to editors:
1. Note 1: Saver Profiles:
|
Saver A |
Saver B |
Saver C |
|---|---|---|
|
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. |
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 plc ("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.