UK pensions firms eye CDC schemes as retirement risks grow

The majority of UK pensions professionals are moving toward collective defined contribution (CDC) schemes, with 76% of respondents currently assessing, exploring, or planning to explore the model within the next three years. However, a significant gap remains between interest and action, as only 52% would feel confident adopting CDC early. Gallagher said this gap between interest and commitment defines the current CDC market, showing organisations are at varied stages.

The findings, from Gallagher’s CDC Report 2026, based on a survey of 250 employers, trustees, and pensions professionals, highlight that organizations are at varying stages of consideration. Instead, the focus will shift to proven results from early adopters (38% of respondents see this as critical) and broader stakeholder buy-in (37%). Multi-employer CDC arrangements are the preferred route for 53% of respondents, though single-employer models still appeal to 34%. Meanwhile, 86% said they would find a sector-wide CDC arrangement attractive, suggesting strong demand for scalable and accessible models.

David Piltz, CEO of Gallagher’s Benefits & HR Consulting Division, warned that the rise of defined contribution (DC) schemes over decades means many retirees may face inadequate incomes. “Over the next five to 10 years, we will start to see more people reaching retirement after spending most, or all, of their working lives in DC arrangements,” he said. “Many of those savers may be disappointed by the income their pension savings provide.”