How UK pension schemes may already be accessing scale without consolidation

Policy discussions about consolidation often assume that scale can only be achieved by making pension schemes consolidate into £25 billion “megafunds.” Under this view, smaller schemes are seen as inherently disadvantaged unless they merge or exit the market.

But the evidence suggests the picture in the UK is more nuanced.

Independent research by the Pensions Policy Institute (PPI) finds that many UK pension schemes already access the benefits of scale, even where the schemes themselves are not large. This can occur where providers are part of larger parent organisations, use large‑scale asset managers, or operate through shared investment and administration platforms.

In practice, this means that scale may exist “under the bonnet,” through investment capability, governance structures, and purchasing power that sit outside the pension scheme entity itself. These arrangements can provide access to a wide range of investment opportunities, specialist expertise, and cost efficiencies without requiring wholesale consolidation of schemes.

Recognising this existing scale matters. If regulation focuses solely on scheme size, there is a risk that it overlooks value already being delivered through these structures and underestimates the diversity of models operating in the UK market.

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

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