Defined contribution pension schemes saw a 21 per cent increase in contributions year on year, with a total of £5.4bn paid into schemes in 2017, news figures from The Pensions Regulator reveal.

Its annual DC Trust report shows that £48bn has now been saved into DC schemes, with membership at 12.6 million people. This is an increase of 29 per cent over the last year, and by more than 400 per cent since the start of 2010. Master trusts account for a major proportion of the increase and now account for 10 million DC savers.

Furthermore, the report found that as more people start saving into pension schemes for the first time, the average asset per membership has declined from £4,700 in 2016 to £3,900 in 2017.

Ninety per cent of people in the private sector now save into a DC scheme, the report said. Despite this, since 2010, there has been a decline in the number of DC schemes, with a reduction of over half, down from 4,560 to 2,180. This does not include micro or self-administered schemes.

However, membership of master trusts has increased from 270,000 at the start of 2012 to almost 10 million in 2017. To compare, as of March 2017, there were 10.5 million members in DB schemes and a total of £1,541bn assets in DB schemes, according to The PPF’s Purple Book.

Commenting, TPR acting executive director for regulatory policy, analysis and advice Anthony Raymond said: “The success of automatic enrolment has put DC schemes – and particularly master trusts - at the heart of pension saving in the UK, and our figures illustrate this trend.

“For these new and existing savers we have a role to protect their benefits and so we are working hard to drive up standards of trusteeship. We are also implementing the Pension Schemes Act 2017, which requires master trusts to meet a clear set of standards in order to obtain authorisation from us to operate.

“We welcome the continued reduction in numbers of DC schemes. We have been concerned about a tail of sub-standard schemes and have been encouraging trustees who cannot or will not meet the standards we expect to consider consolidation.”

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