What can the UK learn from how Australia and Canada built pension scale?

Australia and Canada are often cited as examples of pension systems that have successfully built scale. Their largest schemes are frequently held up as evidence that consolidation leads to stronger performance, greater investment capability, and better outcomes for members.

But the route to scale in those systems is often misunderstood.

Independent research by the Pensions Policy Institute (PPI) shows that scale in Australia and Canada did not emerge quickly or purely through consolidation. Instead, it developed gradually over several decades, shaped by system design choices, funding levels, and policy frameworks that differ significantly from those in the UK today.

In Australia, high and steadily increasing mandatory employer contributions played a central role in building large pension pools over time. In Canada, the scale of the largest pension funds reflects the fact that key public sector schemes are funded, not pay‑as‑you‑go. In both cases, size was as much the outcome of long‑term funding decisions as it was of mergers or structural reform.

As the research highlights, this raises important questions for the UK. Replicating the scale seen overseas without equivalent funding structures or time horizons may not deliver the same results, and comparisons based on size alone risk overlooking the underlying drivers of success.

Download the full PPI report below to explore the evidence in more detail.

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