The bulk of Generation X are projected to have smaller defined contribution pots than both younger and older people, the latest Future Book by the Pensions Policy Institute suggests, ahead of a report by the Pensions Commission on adequacy and the state pension age review. 

Many DC members who are now middle-aged fell into a pension provision gap between the 1990s and 2012, as the UK was slow to mandate and then roll out automatic pension enrolment amid mass closure of defined benefit schemes. A pre-auto-enrolment requirement for companies to give access to a stakeholder scheme often remained unenforced.  

‘The DC Future Book 2026’, published on Wednesday and sponsored by State Street Investment Management and Scottish Widows, projects that savers who are aged 45 to 54 will have £63,000 in their DC pot at state pension age – nearly 15% (£11,000) less than today’s 35 to 44-year-olds, and 10% (£7,000) less than those in the 55 to 64 age group. 

As workplace DC assets could rise to £2.2tn by 2046 with about 14.9m active DC members, the current picture remains one of fragmentation and large numbers of people not included in the system. The PPI found that the median pot in DC schemes was just £15,400 in 2025. By May 2026, a shocking 12m employees were ineligible to be automatically enrolled, outnumbering the 11.45m who were eligible, as the UK continues to make pension enrolment dependent on earning at least £10,000 from a single job. 

Contribution levels remain low, particularly among low earners – half (48%) of employees earning £10,000 to £20,000 contribute the minimum, compared with 12% of those on between £60,000 and £70,000, according to the report. 

“The DC market is evolving, but growth and greater choice do not necessarily mean better retirement outcomes. Our modelling highlights differences in projected pension pots between age groups," said PPI policy researcher Shantel Okello, who authored the report. 

The PPI also looked at non-workplace pensions in this report. It said that about 4.7m (9%) of UK adults reportedly held a non-workplace DC pension pot in accumulation in May 2024, noting that digital tools, targeted support, and wider investment access could further broaden access to retail pensions. There were about £567bn of assets under administration in self-invested personal pensions in 2024. 

Non-workplace pensions are sometimes used as a way to consolidate disparate pots, reflected in the PPI's research, which found that of savers who had consolidated pensions in the three years to May 2024, 35% moved them into a non-workplace arrangement.

Graeme Bold, managing director pensions and investments at Scottish Widows, said that this year’s additional focus on retail pensions broadens the report’s scope, noting that the way people save for retirement and manage their finances is becoming more nuanced and complex.

"A holistic and joined up approach is therefore essential across the whole pensions landscape, as well as broader personal finance, to help UK savers get the best possible outcomes,” he argued.

While the UK pension system has made positive steps, it is not 'job done', said Olivia Kennedy, head of European institutional strategy at State Street Investment Management.

“There are still significant gaps, with contribution rates remaining low, modest pension pot sizes, and increasingly complex retirement decisions. This year’s DC Future Book shines a light on these trends, providing a compelling and actionable roadmap for the sector as it continues to tackle these issues,” Kennedy said.