IA Pension Assets Reach £2.2trn in 2025
In 2025, pension assets overseen by Investment Association (IA) members climbed by 13 percent, reaching approximately £2.2trn, as revealed by the IA’s yearly Investment Management Survey. This growth occurred while pension schemes maintained their share at 51 percent of the institutional mandates handled by IA members.
By the close of 2025, IA members collectively managed £4.4trn in global assets for UK institutional clients, marking a 14 percent rise from £3.8trn in 2024. This figure nears the previous high of £4.6trn. The entire UK pensions market was valued at roughly £3.6trn at year-end 2025, a 3 percent increase from the revised £3.5trn in 2024.
Transition from Defined Benefit to Defined Contribution Plans
Within the broader pensions environment, workplace defined contribution (DC) assets reached £665bn, reflecting a 40 percent growth over the past five years. Meanwhile, defined benefit (DB) pension assets stabilized at around £1.6trn after a period of decline. The IA highlighted that the ongoing shift from DB to DC plans is influencing both the asset types held by pension schemes and the products demanded by savers. DC plans generally maintain a higher equity allocation compared to mature DB schemes.
The management of retirement income has emerged as a growing opportunity for asset managers, as an increasing number of savers transition from accumulation to decumulation. Total decumulation assets grew from £620bn in 2024 to £700bn in 2025, with nearly £400bn allocated to individual annuities. Assets in income drawdown saw an 18 percent rise, reaching £310bn.
Industry Insights and Policy Challenges
The IA emphasized that industry leaders view the evolving retirement market as a significant long-term opportunity, both in terms of investment strategies and the development of products that ensure sustainable income. IA chief executive John Owen stated: “The way people save for retirement is changing. As shown by this year’s Investment Management Survey, individuals are increasingly responsible for making important decisions about how they invest for their future and turn those savings into an income in retirement.” He further noted: “That makes it more important than ever that people have the confidence to invest for the long term.”
Owen also highlighted IA polling showing that 38 per cent of UK adults believed changing pensions policy made it harder to plan for their future. “Government must reckon with this and provide the pensions policy stability needed to help savers to invest for the long term and make informed decisions about their retirement,” he continued. “As the UK’s society ages, a strong and trusted private pensions system will be critical to helping us to live a financially secure retirement.”
DB assets remained relatively stable at about £1.6trn in 2025, down from £2.3trn in 2021, reflecting the long-term maturation and risk reduction in the private-sector DB market. Conversely, insurance assets have grown, with IA noting a 15 percent increase since 2022 to £1.1trn, driven by ongoing pension risk transfer as DB schemes shift liabilities to insurers.
Expansion of the Local Government Pension Scheme
The Local Government Pension Scheme (LGPS) has continued its growth trajectory, with total assets increasing from approximately £276bn in 2020 to just over £400bn in 2025, a 46 percent rise. According to the survey, IA members managed around £350bn of LGPS assets in 2025.
