DC data shows growth in deferred pots
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Deferred memberships have increased by 15% over the past year, while active memberships have decreased by 1%, exacerbating the problem of deferred memberships, new data reveals. Meanwhile, average assets per membership are recovering slightly from a 2020 low.
Though aggregate asset values are now at a staggering £113.5bn, an increase of £26bn or 30% since last year and 413% since the beginning of 2012, the average pot size remains small, the latest DC scheme return data by the Pensions Regulator shows. Average assets per member stood at £5,212, up 20% over the last year; they had reached a low of £3,938 at the start of 2020.
The data also shows that more people retire with a DC pot; the number of memberships in non-micro schemes that retired increased by 24%, from 121,000 to 151,000, between the end of 2020 and 2021.
As well as showing what is happening for savers, it offers a view on the level of consolidation that is happening in the market, this being the government’s stated goal. Over the past year, the total number of DC schemes has declined; the total number of non-micro schemes, including hybrid schemes, has reduced by 12%.
As well as showing what is happening for savers, it offers a view on the level of consolidation that is happening in the market, this being the government’s stated goal. Over the past year, the total number of DC schemes has declined; the total number of non-micro schemes, including hybrid schemes, has reduced by 12%.
The vast majority of DC schemes are still micro schemes; of 27,700 schemes, 26,260 had fewer than 12 members. There are now 36 DC master trusts with 20.7m memberships, and 20.5m of them in master trusts without a DB section; the latter look after more than £78.8bn in assets.
Executive director of policy, analysis and advice David Fairs said the continuing trend of consolidation in the DC market is good news for savers.
Executive director of policy, analysis and advice David Fairs said the continuing trend of consolidation in the DC market is good news for savers.
“The vast majority of DC members continue to be saving into larger, more stable master trusts which, thanks to our authorisation programme, have demonstrated they meet the high standards of governance savers deserve," he said.
“However, every saver deserves to be in a well-run scheme which offers good value for money. We know many small DC schemes are poorly run and we are determined to continue to work with industry to drive up standards of governance and trusteeship," Fairs added, saying he expects DC consolidation to continue as small schemes are now required to demonstrate value for members.
"Where they don’t, we expect them to either wind up or take immediate action to make improvements," he said.
"Where they don’t, we expect them to either wind up or take immediate action to make improvements," he said.
What are your thoughts on the latest DC data?
