Brace for impact: our survey shows how DC schemes are positioning their portfolios
Results from our inaugural survey of DC trusts in the UK show a widening appetite for private markets and a keen interest in renewable energy infrastructure
For the UK’s defined contribution (DC) schemes, 2026 will be a year of change becoming the new constant. The upcoming Pensions Bill, Value for Money (VfM) framework and the Mansion House Accord are set to create a wide range of investment implications.
Set against this backdrop, our inaugural DC Investment Survey — in partnership with Schroders — set out to explore how schemes are positioning their portfolios and bracing for impact. The full set of results are now live.
Survey results can be accessed here
The survey was well received with 56 responses coming in from both master and single trust DC schemes. Collectively, respondents manage over £198bn on behalf of 1.3m employers and represent over 70% of master trust signatories to the Mansion House Accord, providing the industry with a timely and credible overview of the direction of DC investment travel.
Brace for impact
From an investment perspective, the degree to which on-going regulatory reforms in the UK will shape the agenda needed investigating. Our survey results show a sense of disagreement within the sector that reforms alone will achieve the targets they are aimed at.
A key regulatory objective, for instance, is DC consolidation. Increasing the scale of DC schemes, the argument goes, will catalyse investment into UK productive assets. 38% of respondents disagree with this logic. Another 34% believe there are barriers to investing in these assets, but scale is not one of them.
Crucially, for master trust respondents, this degree of disagreement is higher.
Our survey results also show the VfM is unlikely to have a significant effect on investment decisions. Over half of our respondents believe the framework will either not have an effect at all or if it does, the effect will be minor.
Going private
We find evidence to suggest a private markets tilt underway in DC portfolios.
At their most recent investment review, 53% of respondents reported they had either made or were considering an increase in private equity allocations. This was the highest reported increase amongst all asset classes.
This appetite for private equity is notably targeted at the growth phase – 78% of respondents said private equity was the most attractive opportunity for growth phase strategies.
Retirement phase strategies are attracting their fair share of private market capital too. 60% of respondents reported private debt as the asset class of choice for such strategies.
Renewable infrastructure: the DC asset of choice
Within the sustainable investment opportunity set, our survey shows a strong appetite amongst DC schemes for infrastructure assets. 82% of respondents said they believe renewable infrastructure provides the most attractive net zero investment opportunities.
The evidence suggests there are factors that condition this appetite. Amongst them, performance and returns emerged as the most vital. When we asked respondents to rank factors that mattered the most when it came to climate-related investment decisions, 71% of them chose return expectations, followed by 34% who cited risk appetite.
Crucially, our survey suggests performance is a double-edged sword. While return expectations rank high on the investment agenda, they also emerged as the greatest barrier to sustainable investment by DC schemes. 63% of respondents said performance concerns was a barrier to these decisions.
The full set of results have more details on how schemes plan to invest within the UK, how private market investments are likely to be structured and which regulatory components schemes are keeping an eye on.
