Past. Present. Possible. Five themes shaping the future of DC pensions

DC pensions have matured significantly, governance standards have evolved, and there is a growing focus on delivering better outcomes for members rather than simply managing assets.

These successes provide important lessons for the future. At the same time, they also highlight the next set of challenges the industry must address.

1. Scale only matters when it delivers better outcomes

The debate has moved beyond whether DC will consolidate to what greater scale should deliver for members. Damian Moloney, Chief Global Officer at AustralianSuper, joined L&G’s Martin Dietz and L&G Mastertrust Trustee Tegs Harding to examine how scale can widen investment choice, strengthen governance and support better services and outcomes for members.

Bringing together perspectives from the UK's largest commercial master trust and one of the world's largest pension funds, the discussion highlighted a common theme: scale only matters when it translates into tangible benefits for members. Better governance, broader investment opportunities and improved retirement outcomes were seen as the true measures of success, not size alone.

2. Adequacy is the unfinished business of auto-enrolment

As the industry matures, adequacy is becoming one of the defining issues of the next decade.

Automatic enrolment has brought millions more people into pension saving, but participation does not guarantee an adequate retirement. That challenge framed a panel I moderated with Pensions Commissioners Baroness Jeannie Drake and Professor Nick Pearce; Gary Dewin, People Director at Co-op; and Andrew Harrop, Director at Public First.

The Pensions Commission’s May 2026 interim report identified systemic issues with pensions adequacy in the UK. Pensions Commissioners Baroness Jeannie Drake pointed to data published in the interim report that exposed the scale of the adequacy issue in the UK.

The Pensions Commission has already questioned whether the 8 per cent contribution rate in defined contribution is sufficient. A survey of conference delegates on the day found an overwhelming majority (81 per cent) in favour of the future contribution burden being split between employee and employer.

3. Retirement income is the next test for DC

If accumulation defined the first phase of DC, turning savings into a sustainable income will define the next. 

How can members best turn their pension savings into sustainable income? What level of support do they need when making retirement decisions? What does good retirement income actually look like?

To help answer these questions, L&G’s Kath Photiou chaired a retirement dating special with contestants pitching the industry's leading retirement income solutions. From guaranteed income, drawdown and emerging models such as retirement collective defined contribution, we explored what each approach brings to the retirement relationship.

The discussion underlined why no single retirement solution fits every member. In fact, conference delegates voted 67% in favour of a new Guided Income approach that combines flexibility in the earlier years of retirement with a guaranteed income in the later years. 

4. AI has moved from future promise to practical delivery

How do we harness artificial intelligence (AI) responsibly? Where is it already delivering tangible value? And where should we proceed with care? Our speakers cut through the noise and hype to explore the reality and opportunities AI presents.

Microsoft’s UK Chief Digital Officer Jed Griffiths joined L&G’s James O’Keefe and Olasumbo Biobaku-Mason for a discussion chaired by L&G’s Sarah Aitken. Rather than debating artificial intelligence (AI) in the abstract, the panel focused on where it can add value now, from operational efficiency and personalised communications to clearer digital support for members.

The opportunity comes with conditions. Trusted data, strong governance, human oversight and clear accountability will be essential if AI is to improve experiences without weakening confidence.

5. Progress depends on collaboration

No single organisation can solve adequacy, engagement, retirement income and technology adoption alone. The day’s mix of policymakers, employers, providers and external experts reflected the breadth of partnership required.

Closing keynote speaker Stacey Dooley MBE brought a wider lens to the theme of possibility, drawing on a career built around making complex human stories accessible. Her appearance reinforced a broader point from the conference: change begins with understanding people, not simply products or policy.

From progress to possibility

The next phase for the DC pensions system will require the same long-term focus, but in a more complex political, economic and technological environment.

Scale must translate into value. Participation must lead to adequacy. Retirement savings must become sustainable income. AI must be applied responsibly. And progress will depend on organisations working together.

If one message emerged from this year's conference, it is that tomorrow's outcomes are being shaped by the decisions we make today. 

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