Marvin OnumonuDefined contribution (DC) pension take-up is rising, with 1.4 million more people saving into DC workplace pensions in 2024 than in 2021, according to the latest annual update from the Office for National Statistics (ONS).
The research found that only 18% of workers are not in a workplace pension.
In 2021, 36% of employees with a workplace pension were in defined benefit (DB) schemes and 63% were in DC schemes.
By 2024, DB participation had fallen to 34%, while DC had grown to 65%.
Maurice Titley, commercial director data and dashboards at Lumera, said: “The latest data from the ONS underlines the long-term structural shift taking place across the UK workplace pensions landscape as Defined Contribution provision slowly replace Defined Benefit.
“As DC becomes the dominant form of workplace saving, the industry’s focus is rapidly shifting to how it supports members in building adequate retirement outcomes.
“Reforms such as targeted support and retirement income pathways aim to ensure members are supported throughout their saving journey and are able to make well-informed decisions at the point of retirement.”
Titley added: “Implementing these reforms successfully will require schemes to have the scale, technology and data capabilities to deliver this more personalised form of support that forms a key part of the regulator’s direction of travel.
“With millions more people now relying on DC pots for their retirement income, improving the member experience and helping savers make informed decisions will be one of the defining challenges for the UK pensions system in the years ahead.”
