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Brightwell unveils new insight report on the future of DB Pensions

Brightwell, the comprehensive services provider for defined benefit (DB) pension schemes, has launched a new report, ‘DB 2036: Out of the Woods’ , offering unique insights into how pension schemes are preparing for the future.

Based on in-depth interviews with 14 of the UK’s largest DB schemes, representing more than 698,500 members and £224 billion of assets, the report highlights significant pressures facing the sector, with leaders warning that fragmentation across the UK pensions landscape continues to cause value leakage with duplicated costs as one of the most urgent challenges.

Despite 96%[1] of UK DB schemes closed to new members, the sector will remain significant for some time to come with the Pension Protection Fund (PPF) projecting that in 2036 there will still be £880bn[2] of AUM in DB schemes.

The report highlights several core areas shaping strategic decision-making in the sector over the next decade:

• Preventing value leakage: Value leakage is a major challenge in the UK DB pensions sector, where fragmentation and duplicated costs risk diverting resources away from members and sponsors. As regulatory pressures and expectations around value intensify, the sector is focused on rationalising costs and ensuring stable, trusted outcomes for members.
• Protecting and delivering members’ benefits remains the sector’s guiding principle: Trustees and sponsors emphasise secure, reliable pension payments and a high-quality member experience that needs to evolve to meet the needs of an ageing membership
• Run‑on as a value‑driven strategy for large schemes: Large, well-funded schemes are increasingly favouring run on strategies rather than buying out, reflecting a desire to retain control, utilise scale and retain value for both members and sponsors.
• Administration and operational resilience are critical pressure points: Legacy systems, skills shortages, growing cyber risks and continued regulatory workload are creating significant strain.
• Stability and risk-management dominate investment strategy: Mature schemes are focussed on cashflow matching, hedging and resilience, while open schemes maintain growth assets to help keep contributions affordable.
• Decades of experience have shaped a pragmatic, risk aware culture: Leaders are open to reform but highlight the need for clearer guidance to act confidently. 

Commenting on the report Morten Nilsson, CEO, Brightwell, said: “After decades focussed on repairing deficits, the majority of DB schemes are now operating from a position of relative strength yet are faced with a new set of strategic decisions that will shape the future of member outcomes.

“As the market evolves, a handful of larger schemes with strong covenants will remain. For these, adopting a partnership-led approach can enhance resilience, lower operational friction and costs, and improve outcomes for sponsors, schemes, and members.”

Alastair Russell, Pensions Director, EDF Energy who was interviewed for the report said: “The pensions industry and the regulator are now acknowledging that there is another endgame beyond buy-out. Those schemes that do plan to run-on need to make it a conscious strategy and step up to ensure their governance model continues to evolve to be fit for the future.”

[1] The purple book 2025

[2] Median projected figures for the size of the PPF-eligible universe of UK DB pension schemes at 31 March 2036. Figures assume £50bn a year from assets and £40bn a year from s179 liabilities exiting via buyouts based on recent risk transfer experience.