What's holding us back from implementing CDC schemes?

Collective Defined Contribution (CDC) models have long been spoken about in the market as a potential solution to many of the challenges we see in Defined Benefit (DB) or Defined Contribution (DC) pension schemes in the UK.

In 2024, we saw the launch of the first CDC scheme, and now, approaching two years later, we wanted to explore just how close we really are to more widespread adoption of CDC in the UK.

A new Gallagher report shows that employers, trustees and pension professionals are interested in exploring CDC options. But while appetite is strong, a confidence gap is preventing more widespread adoption.

Six key takeaways

  1. Interest in CDC is rising across the market.
  2. Confidence is a large blocker to adoption.
  3. Sector-wide models are generating strong interest.
  4. Employers are interested, but many remain cautious.
  5. Smaller schemes may need more support to explore CDC.
  6. Practical routes to implementation will shape what happens next.

Informed by a comprehensive survey of employers, trustees and pension professionals and backed up by expert insights from Gallagher's specialists and several industry leaders, this report offers actionable insights to help you assess what a CDC option could mean for your pensions strategy.