Master trusts: how workplace pension schemes are run and protected

If you have been automatically enrolled into a workplace pension, the chances are that your savings sit in a master trust. A master trust is a type of defined contribution pension used by multiple employers, with independent trustees who look after the pension savings on behalf of all the employees who are members¹. Rather than each employer setting up and running its own scheme, many unrelated employers share one large scheme, which spreads the running costs across millions of members.

Master trusts now dominate workplace pension saving. The Pensions Regulator's figures show they held 30.1 million memberships in 2025, which is 92% of defined contribution members, and £208 billion in assets, 83% of the total². In 2024 the count was 28.0 million memberships, or 91% of non-micro defined contribution and hybrid schemes³. There were 33 authorised master trusts in 2024³.

What a master trust is: one scheme, many employers

A master trust is a trust-based occupational pension scheme that serves multiple employers, who may be entirely unrelated, in order to generate economies of scale⁴. In plain terms: one pension scheme, one set of trustees, and thousands or millions of employers whose staff all save as members of that same scheme.

The legal definition has three parts. A master trust is an occupational pension scheme that provides money purchase benefits (the kind where your pot depends on what is paid in and how it grows, not a promised salary-linked pension), is used or intended to be used by two or more employers who are not all connected, and is not a public service pension scheme³. A scheme used only by one company, or only by a group of connected employers, does not count.

Because a master trust is trust-based, it has a board of independent trustees overseeing the scheme¹. Those trustees, not your employer, are legally responsible for looking after members' savings, choosing the scheme's investments and keeping charges under control. This is the main structural difference from a contract-based workplace pension, such as a group personal pension, where an insurance company runs the policy and your employer's duties largely end with paying in.

The Work and Pensions Select Committee described master trusts in 2016 as a "good fit" with automatic enrolment, because they provide ongoing oversight of investments by a trustee board at lower operating costs than single-employer schemes⁴. That judgement has held up: 94% of employers who chose a trust-based scheme opted for a master trust⁶, and automatic enrolment has brought over 23 million people into workplace pension saving⁷. If you want the wider background, see workplace pensions explained and automatic enrolment.

Master trusts now hold most workplace pension savings

The growth of master trusts is the direct result of automatic enrolment, which started in 2012 and required every eligible employer to put staff into a pension⁸. Small employers in particular needed a scheme that was ready to use, cheap to run and professionally governed, and master trusts met that need.

The regulator's 2024 landscape analysis counted 28,005,000 total DC members in authorised master trusts, of which 10,009,000 were active memberships (people currently paying in through an employer)³. Counting each section of the multi-section master trusts as a separate scheme, the regulator regarded master trusts as having 51 schemes in 2024³. By 2025 the headline figures had risen to 30.1 million memberships and £208 billion in assets².

The same trend is visible in the other direction: smaller single-employer schemes continue to exit the defined contribution market, with their members and assets consolidating into master trusts². The government has also legislated, through the Pension Schemes Bill, to require providers and master trusts to manage at least £25 billion in assets under management by 2030⁹, and The Pensions Regulator published a statement on 9 March 2026 to help trustees of DC master trusts prepare for these future scale requirements¹⁰. The practical effect for a saver is that master trusts are likely to become even more dominant, and the average pot in one is likely to grow.

Nest, Smart Pension, Aegon, now:pensions and other master trusts

Most master trusts are names you will only see on your annual statement, because it is your employer, not you, who chooses the scheme. A handful are large and well known.

Nest (short for National Employment Savings Trust) is the UK's biggest master trust, with over 13 million members and 500,000 employers signed up¹. It was set up by the government to give every employer a scheme to use for automatic enrolment, and it is a trust-based workplace pension scheme developed to suit most people¹¹. Nest is open to employers and to self-employed people¹². It offers a choice of six investment funds, including an ethical fund and a Sharia fund, but the flagship Nest Retirement Date Fund is the one the vast majority of members are in¹. Nest also offers a Guided Retirement Fund for members approaching retirement; see Nest Guided Retirement Fund.

Smart Pension charges an annual management charge of 0.3% on the value of your pension¹. Now: Pensions charges an annual investment management charge of 0.3% on the value of your pension plus a monthly administration charge of £2¹, and offers six investment plans and one investment fund¹. Aegon runs a master trust used by many employers; members of Aegon workplace schemes are typically in its TargetPlan, covered in Aegon TargetPlan.

Other master trusts operate in the UK market alongside these, and the full list of authorised schemes is held by The Pensions Regulator. The important thing for a member is not the brand but the fact that every authorised master trust has passed the same authorisation test and is supervised by the same regulator. Our page on workplace pension providers and master trusts describes the market more fully.

Fees and charges: percentage charges and flat fees

Master trusts make money in two main ways: a percentage charge on the value of your pot, and flat fees that cost the same regardless of how much you have saved.

The percentage element is usually an annual management charge or investment charge on the value of your pension. Smart Pension's annual management charge is 0.3% on the value of your pension¹, and Now: Pensions charges an annual investment management charge of 0.3% on the value of your pension¹. A percentage charge costs more in pounds as your pot grows, which is why the level of the percentage matters most for long-term savers.

The flat element is a fixed amount, charged per month or per year. Now: Pensions charges a monthly administration charge of £2¹. Flat fees are the opposite of percentage charges in their effect: £2 a month is a small bite out of a large pot but a proportionally heavy one out of a small pot, particularly a dormant pot left behind when you change jobs.

Automatic enrolment schemes must also stay within a cap on certain charges, which our page on workplace pension charges and the charge cap explains. Charges are deducted from your pot, not billed to you, so you never see an invoice: you see the effect in how fast your pot grows. Your annual statement must show what you are paying.

Default funds and choosing your own investments

Any scheme used for automatic enrolment must have a "default investment arrangement"¹³: a fund that members are placed in automatically unless they actively choose something else. Most people never make an active choice, so the default fund is where the vast majority of master trust members' money sits. In Nest, the default is the Nest Retirement Date Fund, and it is the fund the vast majority of members are in¹.

A default fund is designed to suit people who do not want to make investment decisions. It is typically a lifestyle fund that starts invested for growth and gradually moves towards lower-risk assets as you approach your expected retirement date. The trustees, not you, are responsible for keeping the default fund suitable.

You can usually opt out of the default and pick from the scheme's other funds. Nest offers six investment funds including an ethical fund and a Sharia fund¹, and Now: Pensions offers six investment plans and one investment fund¹. The trade-off is yours to make: choosing your own investments means the outcome depends on your choices, while the default fund carries the trustees' responsibility for suitability. Our page on default funds in workplace schemes goes into this in more detail.

Taking your money: from age 55

A master trust is a defined contribution pension, so what you have at retirement is a pot of money, not a promised income. If you are 55 or over, you have access to your pension fund⁵. The minimum age is due to rise to 57, and the detailed rules, including the planned date and protections for some older schemes, are covered on our page about when you can access your pension.

From that age you can leave the pot invested, take it in lump sums, buy an annuity, or use drawdown, and you can usually mix these. The main options are explained in your options for taking money from a pension, with drawdown and annuities covered in their own pages. Typically 25% of the pot can be taken tax free, with the rest taxed as income; see tax-free cash from your pension and how pension income is taxed.

Free guidance is available before you decide. Pension Wise offers free, impartial guidance about your options for people aged 50 and over, and MoneyHelper can help with workplace pension questions generally.

Moving your pot: transfers, exit fees and scam checks

You can transfer your UK pension pot to another registered UK pension scheme¹⁴. People transfer master trust pots for several reasons: to combine old pots when they change jobs, to move to a scheme with lower charges or more investment choice, or to consolidate everything in one place before retirement. Our pages on combining pension pots and transferring pensions to another provider cover the decision in depth.

The usual process has six steps¹⁵:

1. Check your current scheme allows transfers out.
2. Make sure you will not lose any benefits.
3. Decide which scheme to transfer into.
4. Check if you need to pay for financial advice.
5. Ask your current provider for a transfer value.
6. Ask the new scheme to start the transfer.

Transfers are not free of consequences. You may have to make payments to the new scheme, pay a fee to make the transfer, lose any right you had to take your pension at a certain age, lose any fixed or enhanced protection, or lose any right you had to take a tax free lump sum of more than 25% of your pot¹⁴. Complaints about transfers often involve higher charges not being disclosed, the loss of guarantees such as guaranteed annuity rates, or unsuitable investments¹⁶.

Because transfers are a scam risk, the rules build in checks. Trustees must carry out certain checks and processes when dealing with pension transfer requests¹⁷, and the governing body should carry out due diligence on the scheme a member wants to transfer to, to check whether the transfer can legally be paid¹⁸. Trustees must also send a pension scams leaflet to any member who requests a transfer¹⁹. The Pensions Schemes Act 2021 introduced these rules to protect members from pension scams by helping trustees ensure transfers are made to safe and not fraudulent schemes²⁰, and the receiving scheme must satisfy certain conditions, such as being a public service pension scheme, a master trust, or a collective money purchase scheme²¹. Despite concerns from industry that 5% of pension transfers could have features of a scam, the regulator pressed ahead with the framework²². See pension scams for the warning signs.

How The Pensions Regulator authorises and supervises master trusts

All master trusts must be authorised by The Pensions Regulator and are subject to regular reviews by the regulator¹. The authorisation and supervision regime has applied to both existing and new master trusts since 1 October 2018⁴. The Pensions Regulator is the regulator of work-based pension schemes in the UK²³, and it regulates trust-based pension schemes, which have a board of trustees overseeing the scheme²⁴.

To be authorised, a master trust must satisfy five criteria⁴:

• The people running the scheme must be fit and proper.
• The scheme must be financially sustainable.
• The funder of the scheme must meet certain requirements.
• The scheme must have adequate systems and processes.
• The scheme has to prepare a continuity strategy, a plan for what happens to members if things go wrong.

The aim of the regime is that members of master trust schemes have equivalent protections to members in other types of pension scheme²⁵. Supervision does not stop at authorisation: the regulator reviews schemes on an ongoing basis, and its statutory objectives include protecting members' benefits and maximising employer compliance with automatic enrolment duties²⁶. Employers choosing a scheme are told to check that it is either regulated by the Financial Conduct Authority or has been independently reviewed, known as master trust assurance¹³.

If a master trust closes or winds up

A master trust cannot simply disappear with your money. Any scheme that opts out of applying for authorisation, or which fails to meet the required standards upon application, will be required to wind up and transfer its members to an authorised scheme⁴. The continuity strategy every scheme must prepare exists precisely so that members' savings have a planned destination if the scheme fails or exits the market.

Because a master trust is a defined contribution scheme, your pot is invested assets held for you, not a promise from your employer. If your employer goes out of business, you will still get your pension, but your pension pot might be reduced because administration costs are paid by members' pension pots²⁷. The scheme itself carries on regardless of any one employer's fortunes, since it serves many employers.

This is different from a defined benefit scheme, where a failed employer can put the promised pension at risk and the Pension Protection Fund steps in. Master trust members do not need the PPF in the same way, but the compensation position for the underlying investments is covered on our page comparing PPF and FSCS protection.

When your employer does not pay in

Your contributions are deducted from your pay and your employer pays its own share; both should reach your pension scheme promptly. If your pension contributions have not been paid into your scheme for 90 days or more, that is a trigger for reporting to The Pensions Regulator²⁸. You can report missing payments online, giving the name and address of your employer, your employer's PAYE number if it has one, how much money you think is missing and when, plus any evidence²⁸. Missing payments and employer non-compliance with pension duties are reported using a different form from other concerns²⁹.

If your employer becomes insolvent, there is a route to recover unpaid contributions. You can claim for contributions which were deducted from your pay but were not paid into the scheme during the 12 months before your employer became insolvent, and you may also receive unpaid contributions payable by the employer on its own account for the same 12 months. The Department may also pay 10% of the total pay of the employees concerned for the 12 months ending on the day before the employer became insolvent³².

Separately, some life events change what your employer must pay in. If you are on paid leave, such as maternity leave, your employer's contributions are based on the salary you would have received if you were not on leave¹². If you are not getting paid, your employer still has to make pension contributions in the first 26 weeks of your leave, and after that only if your contract provides for it¹¹.

Complaints and where to get help

If something goes wrong with your master trust, there is a set route to follow. You can complain to MoneyHelper or the Pensions Ombudsman about how your workplace pension is managed²⁷. Before applying to the ombudsman, you must first make a formal complaint directly with the relevant party, such as the trustees or manager of your pension scheme, the administrator or an employer³³. The Pensions Ombudsman's member guidance hub covers how to complain about a pension problem, common complaint topics including overpayments, ill-health pensions, death benefits and incorrect pension information, who can complain and what the ombudsman can and cannot do³⁴.

The Pensions Ombudsman can help if you have a complaint about your pension scheme, and its decisions are binding on the scheme. Complaints about pension transfers from personal pension arrangements can also go to the Financial Ombudsman Service, which received 931 complaints about personal pensions in the first quarter of 2026/27³⁶. If you think your employer or workplace pension scheme is involved in wrongdoing in an area it regulates, you can report concerns to The Pensions Regulator online, or by phone, email or post if you cannot report online, and you can do so in confidence³⁷.

Self-employed people and master trusts

Automatic enrolment only applies to workers with an employer, so self-employed people are not automatically enrolled into anything. If you are self-employed or a single person director, you do not have to enrol yourself in a workplace pension; your options include a personal or stakeholder pension from various providers, or Nest¹¹. Nest is a workplace pension scheme open to employers and self-employed people¹², which makes it the one master trust most self-employed people can join directly.

Other routes exist outside the master trust world: personal pensions, SIPPs and the options compared on our page about pensions for the self-employed. One feature that can help regardless of scheme type: other people, such as family and friends, can also pay into the scheme on your behalf¹, so a partner or parent can contribute to your pension even if you have no employer paying in.