UK pension schemes shift from recovery to readiness as stronger funding brings endgame into focus

London, 2025-12-03 – UK defined benefit (DB) pension schemes are increasingly confident in their funding positions and are taking pragmatic steps toward long-term stability, according to Russell Investments’ UK Defined Benefit Market Insights Study.

Now in its sixth year, the research charts a clear shift from recovery to readiness across the UK DB landscape. While buyout remains the preferred destination, more schemes are exploring low-dependency and run-on strategies as improved funding expands the range of viable long-term outcomes.

Simon Partridge, Head of UK Fiduciary Management at Russell Investments, said:

“This year’s research reflects a market that is both confident and pragmatic. Stronger funding has put endgame within reach for many schemes, but trustees are progressing carefully as they address governance, data, and operational readiness. We are also seeing more schemes consider low-dependency or run-on options, reflecting a desire for flexibility and control as they define their future path.”


Key findings from the 2025 study

  • Buyout still leads, but other solutions grows in prominence

    Buyout remains the most popular endgame target, with 38% of schemes naming it as their current goal. Interest in low-dependency run on strategies continues to rise, up to 32%, up from 27% last year, signaling greater openness to bespoke long-term solutions. Smaller schemes tend toward buyout for affordability, while larger schemes are increasingly pursuing bespoke, multi-phase strategies.

  • Risk transfer activity almost doubles

    39% of respondents have already executed a risk transfer – nearly double last year’s figure. Only 24% expect to complete one in the next 12 months, underscoring the time required to refine data, documentation, and governance. Insurer appetite remains strong, though operational readiness continues to be a constraint.

  • Investment strategies evolve cautiously

    DB investors remain defensively positioned, with steady allocations to investment-grade credit (24%) and government bonds (23%). However, private credit allocations have surged to 17% (from 7%) as schemes seek higher yields while maintaining liquidity.

  • Schemes trim illiquids to stay agile

    With endgame in sight, schemes are reducing illiquid exposures to stay flexible and transaction-ready. Property (27%) and private equity (22%) are the most likely asset classes to see long-term reductions.

  • Governance demands fuel outsourcing growth

    64% of respondents have appointed or are considering an outsourced provider to strengthen oversight and risk management. The top reasons cited were depth of expertise (57%), manager selection quality (43%), and support for endgame planning (27%, up from 22% in 2024).

  • Risk priorities shift towards economics

    Concerns about regulation have declined sharply (32%, down from 46%), while worries about market volatility (32%) and recession (22%) have risen. Geopolitical risk (41%) and monetary policy uncertainty (34%) also remain key themes.

  • ESG commitments hold steady

    More than half of schemes (54%) have now set a net-zero target. While only 17% aim for 2030, most cite 2050 as a more realistic horizon as ESG integration matures within the DB framework.



About the research

The Russell Investments UK Defined Benefit Market Insights Study 2025 surveyed over 100 senior stakeholders across the UK DB market, including trustees, CIOs, and pension managers, representing nearly £250 billion in assets as of October 2025. The survey was supplemented by in-depth interviews with professional trustees and investment consultants to provide a detailed view of current challenges and opportunities across the sector.


View the study here.

About Russell Investments

Russell Investments is a leading global investment solutions partner providing a wide range of investment capabilities to institutional investors, financial intermediaries and individual investors around the world. Since 1936, Russell Investments has been building a legacy of continuous innovation to deliver exceptional value to clients, working every day to improve people’s financial security. The firm has $355 billion in assets under management (as of 30/6/2025) for clients in 30 countries. Headquartered in Seattle, Washington, Russell Investments has offices in 17 cities around the world.

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