Delivering value in defined contribution

Over the last decade, we have seen a significant shift in the defined contribution (DC) pension industry in the UK. The DC market has consolidated: own trust pension schemes have been in decline (and to a lesser extent contract-based schemes too), with Master Trusts emerging as the main beneficiaries. Today, around 3 in 10 employers (28%) provide pension plans using a master trust arrangement and, with government policy aiming to enable a small number of DC megafunds, this momentum towards consolidation is only likely to grow. Alongside this trend, we see greater reliance on provider-designed investment strategies and less use of strategies designed by employers or pension trustees.

With these changes, we see an increasingly cost-competitive environment. Annual management charges (AMCs) have declined from an average of 38 bps in 2017 to 28 bps in 2025, and today nearly 2 in 3 employers (61%) have AMCs less than 30 bps. This is against an emerging desire from Government and policy makers to focus more on value, rather than cost.

Yet, even with charges at historic lows, our 2025 WTW DC Pensions and Savings Survey finds companies are still ambitious to get more value from their benefits and to use the retirement plan as a tool to attract, retain and engage their workforce. However, with very limited movement in average contribution rates in the last decade and no indication employers intend to increase them in the future, it seems employers aren't looking to spend more; instead, they are focussed on driving an improved deal from their providers and enhancing the experience and support they offer employees.

Here are four things employers can do to add value now.

Final thoughts

The past decade has seen growing consolidation and efficiency within the DC pension landscape, and the next decade is likely to see further steps in this direction. For employers, it's a buyers' market, but this implies an ongoing need to review and benchmark their provision against their peers, to ensure they continue to secure a good deal.

But it's not just the costs. Employers continue to reframe their plans around what employees need, prioritising stronger support, clearer guidance and a more engaging employee experience at key moments that matter. The challenge is then to drive enhanced value across the full range of investment strategies, at-retirement support and member engagement.

At WTW, we work with a wide range of employers and trustees to navigate these challenges — helping them design retirement strategies that are fit for purpose and fit for the future. We support employers and trustees in their governance, and monitoring and managing their provider relationships, to deliver value to both employers and employees.

If you would like a personalised benchmark summary to understand how your organisation's situation compares to others and to examine the trends outlined above in more detail, please participate in the survey today.