Workplace pension providers and master trusts

A workplace pension is a way of saving for your retirement that is arranged by your employer, and in most cases your employer also adds money into the pension scheme for you¹. All employers must offer a workplace pension scheme by law, and when they automatically enrol you they must write to you with the date they added you, the type of scheme, who runs it, how much they will contribute, how much you will pay in, and how you can leave². Some workplace pensions are called "occupational", "works", "company" or "work-based" pensions, but these are all names for the same thing¹.

The provider is the firm that actually looks after the money. In a defined contribution scheme, the most common kind under automatic enrolment, your employer chooses a pension provider to invest your pension contributions³. The scheme itself is run by administrators or trustees⁴. Who the provider is matters for what you are charged, what funds your money goes into, and who you contact when something goes wrong, so this page explains how the different kinds of provider work, what they cost, and where your protections sit.

What a workplace pension provider does

A workplace pension is arranged through your employer as a way of saving for your retirement¹⁰. Behind it sits a provider or a scheme, and the two main building blocks work differently. There are two types of workplace pension scheme: defined benefit and defined contribution¹¹. In a defined benefit scheme your pension is based on your salary and years of service, and the provider's job is mainly to fund and administer the promise. In a defined contribution scheme, the money paid in is invested to build a pot, and the provider decides (within the scheme's fund range) where it goes, subject to the scheme's governance.

In a defined contribution scheme, your employer chooses the pension provider to invest your pension contributions³. That provider is usually an insurance company, bank or building society: personal pension schemes, including stakeholder pension schemes, are provided by insurance companies, banks and building societies⁴. A stakeholder pension is a money purchase pension provided by a bank, building society or insurance company, and trade unions may also offer them to members¹². Some employers offer personal pensions as workplace pensions¹³, which means the scheme you are enrolled into may not be a traditional occupational scheme at all but a contract with a financial firm.

The provider's day-to-day work includes collecting contributions, investing them, sending you annual statements, holding your records and paying out when you retire. Your employer has duties alongside this: they must pay at least the minimum contributions to the pension scheme on time, usually by the 22nd of each month, and they can pay the first three months of contributions as a lump sum on the 22nd of the fourth month². They must also let you leave the scheme (called "opting out") if you ask, and refund money you have paid in if you opt out within one month².

Automatic enrolment has made these arrangements near-universal. Scheme participation has risen by 13 percentage points among working-age adults, from 42% in 2014 to 2015 to 55% in 2024 to 2025¹⁴, and official statistics report on participation and contributions in workplace pensions across Great Britain over the first decade of the policy¹⁵. The result is that most working people now have a relationship with a pension provider they did not choose, which is why the rules around how these schemes are run, charged and supervised matter.

Master trusts: one scheme shared by many employers

A master trust is a trust-based occupational pension scheme that seeks to generate economies of scale by serving multiple employers, who may be entirely unrelated⁶. In plain terms: instead of every employer setting up its own scheme, many employers, sometimes thousands of them, sign up to one shared scheme, and each member has their own pot within it. The formal definition is that a master trust is an occupational pension scheme that is used by more than one employer, provides money purchase pensions (either alone or with other benefits), and is not a public sector scheme or used only by connected employers¹⁶.

The Pensions Regulator (TPR) regulates all defined benefit pension schemes and defined contribution occupational pension schemes, and these include master trusts¹⁷. Because a master trust holds the retirement savings of many unrelated employers' workers in one place, it faces a dedicated authorisation regime: TPR is responsible for authorising and supervising master trusts against five criteria⁶. The aim of the authorisation and supervision regime is that members of master trust schemes have equivalent protections to members in other types of pension scheme¹⁶.

Master trusts sit alongside other multi-employer structures. Collective money purchase schemes, introduced under the Pension Schemes Act 2021, are occupational pension schemes set up under trust by an employer or group of connected employers²⁰. The Act also created powers for regulations to stipulate destinations and circumstances for transfers, protecting members from pension scams by helping trustees of occupational pension schemes ensure transfers go to legitimate destinations²⁰.

For a member, the practical difference between a master trust and a single-employer scheme is mostly scale. A large master trust spreads administration and governance costs across many employers, which is one reason charges in large schemes tend to be lower, and it is run by a board of trustees that does not answer to any one employer. The dedicated guide to master trusts covers how these schemes are authorised, supervised and wound up in more detail.

Contract-based and trust-based schemes: how each one works

Every workplace pension is either trust-based or contract-based, and the difference decides who regulates it and who watches out for your interests. The FCA regulates contract-based schemes, in which scheme members sign a contract with a pensions provider appointed by the employer; TPR regulates trust-based schemes, which have a board of trustees overseeing the scheme¹⁹. In a trust-based scheme, trustees hold the assets for members and are legally responsible for running the scheme in their interests. In a contract-based scheme, you have a direct contract with the provider, and governance is exercised through the provider's own structures.

Trustee independence is built into the rules for some scheme types. For stakeholder pension schemes established under a trust, at least one trustee, and at least one-third of the total number of trustees, must be neither connected with nor an associate of any person providing services to or otherwise managing the scheme, other than as a trustee²¹. This is designed to stop the firm running the scheme from packing the trustee board with its own people.

Both kinds of scheme are within the Pensions Ombudsman's remit. The Ombudsman covers workplace, employer and stakeholder pension schemes, small self-administered pension schemes, self-invested personal pensions, free standing additional voluntary contribution schemes, annuities and section 32 buy-out policies, and executive, group and personal pension plans²². So whichever structure your employer has chosen, there is a single complaints body for disputes about how it is run.

The distinction also matters when you transfer. The rules on transfers distinguish between the types of scheme that can receive your money: the first condition for a transfer without the usual checks being triggered lists a public service pension scheme, an authorised Master Trust scheme, or a collective money purchase scheme as receiving schemes²³. This is part of the scam protection built into the transfer regime, covered in more detail under bulk transfers below.

Charges and what they come out of

The pension provider may charge you for starting and running your pension, and usually they take a percentage from your pension fund²⁴. In defined contribution schemes, the scheme provider investing your pension often charges an amount based on the value of the pension¹¹. Because the charge is a percentage of your pot rather than a flat fee, it is taken year after year, and its effect compounds: a higher percentage does not just cost more this year, it reduces the amount that is invested and growing for every year after that.

Charges vary by the type and size of scheme. The government's pension charges survey segments its results by different scheme types and characteristics, such as the number of members of the scheme, and whether the scheme is a master trust, a trust-based or contract-based scheme²⁵. Large multi-employer schemes tend to be able to negotiate lower charges than small single-employer schemes, which is one of the main arguments for the scale tests described later on this page. The dedicated guide to workplace pension charges and the charge cap sets out what the cap covers and what it does not.

What you pay in, and what your employer pays in, is separate from the charges. Your employer must make contributions to your workplace pension scheme⁴, and being part of your workplace pension may also mean you benefit from employer contribution as well as tax relief on the income you pay in²⁶. If you are on paid leave, you and your employer continue making pension contributions, and the amount you contribute is based on your actual pay during that time⁷. The guides to pension tax relief and to auto-enrolment minimum contribution rates cover those rules.

Your employer's obligations around the money are specific. They must pay at least the minimum contributions to the scheme on time, usually by the 22nd of each month, and they may pay the first three months of contributions as a lump sum on the 22nd of the fourth month². If you opt out within one month of being enrolled, they must refund the money you have paid². If you are concerned that contributions are not being paid over, that is something you can report to TPR, described in the help section below.

Taking money out: usually not before 55

You cannot usually take money from your pension scheme until you are at least 55, unless you are seriously ill⁷. That minimum age is set to rise from 55 to 57 in 2028, so anyone planning to access a pot in the next few years needs to check how the change affects them. The rules on when you can get at your money are the same in principle whether your scheme is trust-based or contract-based, though the process for taking benefits differs by scheme.

Accessing the pot does not necessarily mean stopping work. You may be able to draw all or some of your lump sum and pension while still working full or part-time for the same employer, depending on the scheme's rules¹⁰. What you take and when is a decision with tax consequences: the guides to your options for taking money from a pension, pension drawdown and how pension income is taxed cover the choices and the tax treatment, and Pension Wise offers free guidance on them.

The pot itself remains yours whatever happens to the job. Your workplace pension belongs to you, even if you leave your employer in the future²⁷. If your employer goes out of business and you are in a trust-based defined contribution scheme, you will get your pension, but your pension pot might be reduced because administration costs are paid by members' pension pots³. The guides to what happens to your workplace pension when you leave a job and to the Pension Protection Fund cover the position for defined benefit schemes.

Salary sacrifice and the £2,000 National Insurance relief cap

Salary sacrifice is an arrangement where you give up part of your salary and your employer pays it into your pension instead. It saves National Insurance on both sides, which is why many employers offer it. That tax advantage is being capped. From 6 April 2029, only the first £2,000 per annum of employer pension contributions made via salary sacrifice by each employee will be exempt from National Insurance contributions⁸. Above that threshold, employer and employee National Insurance contributions will apply at existing rates²⁸.

The reform removes what is known as the Optional Remuneration Arrangements excluded exemption for employer pension contributions for Class 1 National Insurance contributions, where salary sacrifice arrangements exceed an annual £2,000 cap²⁹. In the Budget that announced it, the change was described as capping NICs relief on salary sacrifice into pension schemes to the first £2,000 of pension contributions per person³⁰. The government's wider position on pension tax relief is unchanged: it has retained Income Tax and National Insurance contributions reliefs on pension contributions that are worth over £70 billion per year⁸.

The impact is uneven, and the government's own estimates show who is affected. Of those using salary sacrifice, 3.3 million sacrifice more than £2,000 of salary or bonuses, while around 4.3 million people are fully protected by the £2,000 threshold⁸. For employees whose salary sacrifice contributions exceed the limit, the average additional employee National Insurance contributions liability is estimated to be £84 in the first year of impact, tax year 2029 to 2030⁸.

The guide to salary sacrifice for pension contributions explains how these arrangements work, what happens to your statutory rights when you sacrifice salary, and how the treatment differs from relief at source.

Bulk transfers: when your pension can be moved without your consent

Normally, money leaves your pension only if you ask for a transfer. You can usually transfer or consolidate your pensions at any point, unless the scheme rules list restrictions³¹. Pension consolidation is where you bring multiple pensions together by transferring them into one provider or scheme³¹. In some cases it is also possible to transfer to a new pension provider after you have started to draw retirement benefits³².

The government is changing the rules so that, in some circumstances, whole schemes can be moved without each member's consent. The Pensions Investment Review proposes changes that would enable transfers without consent into either a trust-based or contract-based arrangement³³. The government's workplace pensions roadmap sets the introduction of bulk transfers without consent for contract-based schemes for early 2028. The idea is to allow small, inefficient schemes to be consolidated into larger ones, so that members end up in better-value arrangements without each person having to sign a transfer form.

Individual transfers keep their protections. The transfer rules list the kinds of receiving scheme that satisfy the first condition: a public service pension scheme, an authorised Master Trust scheme, or a collective money purchase scheme²³. The Pension Schemes Act 2021 provides for regulations to stipulate destinations and circumstances for transfers, protecting members from pension scams by helping trustees of occupational pension schemes ensure transfers of pension money go to legitimate destinations²⁰. TPR states that as the regulator for workplace pensions, its primary focus must always be on ensuring savers' pension money is protected³⁴.

Not every pot can be moved. You might not be able to transfer your pension if you have a share of an ex-partner's pension following a divorce, or a scheme with special features or guarantees like a Guaranteed Minimum Pension³⁴. Free, impartial information about transferring your pension is available from official sources³², and the guides to transferring pensions, the risks of transferring and pension scams cover what to check before moving money.

Value for Money: how schemes will be compared

The government is putting the value delivered by defined contribution schemes under formal scrutiny. A consultation proposed key metrics, standards and data disclosures for DC pension schemes under the Value for Money (VFM) framework³⁵, and the Pensions Regulator has said pension value is to be put under the spotlight⁵. The framework is intended to compare schemes on investment performance, costs and charges, and service quality, so that poor-value schemes are identified rather than left to run indefinitely.

The most consequential proposal is a scale test. The government will legislate, through the Pension Schemes Bill, to require that providers and master trusts in multi-employer schemes have £25 billion in assets under management by 2030⁹. There is a transition pathway for smaller schemes: a provider or master trust that can demonstrate it will have at least £10 billion in assets under management in an arrangement by 2030, with a credible plan to have £25 billion by 2035, can continue on that pathway⁹.

The government's workplace pensions roadmap sets implementation of the Value for Money framework for late 2028. TPR will also include Pledge compliance as an expected part of the "scheme oversight and customer service" Value for Money assessment for trust-based schemes, subject to consultation findings³⁴. For savers, the practical effect of consolidation driven by these tests is likely to be that pots are moved between providers, which is why the bulk transfer rules above matter.

Transparency tools are arriving alongside. Pensions dashboards will show information about pensions from different providers and the State Pension securely and in one place¹⁹, and The Pensions Regulator and the Financial Conduct Authority will regulate the pension schemes and providers sharing data with dashboards¹⁹. The guide to pensions dashboards covers what will be shown and when.

Where to get help with a workplace pension

If something has gone wrong with how your workplace pension is managed, there are set routes to follow. You can complain to MoneyHelper or the Pensions Ombudsman about how your workplace pension is managed³. The Pensions Ombudsman covers workplace, employer and stakeholder pension schemes, small self-administered pension schemes, self-invested personal pensions, free standing additional voluntary contribution schemes, annuities and section 32 buy-out policies, and executive, group and personal pension plans²². The guide to the Pensions Ombudsman and complaining about a pension explains how the process works and what it can award.

MoneyHelper provides free and impartial money and pensions guidance¹⁸. If you think your employer or workplace pension scheme is involved in wrongdoing in an area it regulates, you can report your concerns to The Pensions Regulator in confidence¹⁸. For advice about increasing your workplace or private pension, the official guidance is to speak to a financial adviser¹, which is a paid service, unlike the free guidance from MoneyHelper and Pension Wise.

If you have simply lost track of a scheme, start with your employer's letter and your annual statements, which must name the scheme and who runs it². The guide to finding lost pensions covers the Pension Tracing Service. And if you are weighing up what a provider offers against another option, the guides to personal pension and SIPP providers and to combining pension pots or keeping them separate set out the choices side by side.