The Pension Schemes Act 2026 sets a £25bn scale threshold for the multi-employer default arrangements most auto-enrolment members sit in, and corporate advisers need to know where their clients’ current provider stands well before the 2030 deadline bites.

In reading this article you will understand:

  • What the Pension Schemes Act 2026’s DC scale test actually requires, including the £25bn and £10bn thresholds and the routes around them.
  • Which arrangements the test applies to, and roughly where named master trusts and GPPs stand against the thresholds today.
  • How to build a provider’s scale trajectory into scheme reviews and new business selection now, rather than waiting for 2029.

The Pension Schemes Act 2026, which received Royal Assent on 29 April 2026, sets a hard scale test for the multi-employer default arrangements most auto-enrolment (AE) members actually sit in. From 2030, a defined contribution (DC) master trust or group personal pension (GPP) must run at least one main-scale default arrangement of £25bn or more in assets under management to keep qualifying for AE contributions, unless it can show a credible route to that scale by 2035. For corporate advisers the question is a concrete one. Is the provider you’ve recommended, or the one already running a client’s scheme, on the right side of that line, or moving towards it fast enough to count by 2030?

The pressure is already showing up in the numbers. The Pensions Regulator’s (tPR’s) own data show the number of non-micro DC and hybrid schemes fell 15% in the year to 2025, from 920 to 790, concentrated among schemes with fewer than 5,000 members. The Act puts a hard deadline and a hard number on a trend that was already under way.

The £25bn Test, and the Routes Around It

The headline number is £25bn. From 2030, a DC multi-employer scheme’s main-scale default arrangement, the fund the great majority of members are placed into without making an active choice, must hold at least that much in assets under management to remain a qualifying home for AE contributions. Schemes not yet there have two routes to stay in the market. The first, the Transition Pathway, needs at least £10bn in the main-scale default arrangement by 2030, plus a credible plan, covering organic growth, employer retention and consolidation activity, showing how the scheme reaches £25bn by 2035. The second, the Innovation Pathway, which the Act itself calls new entrant pathway relief, is aimed at schemes with no existing back book. They qualify by showing strong growth potential and real product innovation rather than assets already under management.

tPR has also picked up a discretionary power, added by amendment during the Bill’s passage, to exempt a scheme from the scale test if it can show it continues to deliver value for money for members regardless of size. How that power will be used in practice, and the fine detail of both pathways, is still to be settled. DWP published a discussion paper on the key elements of the scale policy on 13 July 2026 and has said it will consult on draft regulations during 2027. Treat the mechanics as directionally clear rather than finalised.

The Provider Landscape Today

Some names already sit comfortably clear. Nest, the public-sector-backed master trust, held around £63bn at 31 March 2026 and is on track for £100bn by the end of the decade. L&G’s Mastertrust and Fidelity’s FutureWise default have both confirmed passing £25bn, and the People’s Pension, which crossed £30bn back in October 2024, reached £40bn in January 2026. None of those four needs the Transition Pathway.

Others sit further back. On Corporate Adviser’s May 2026 comparison, Aviva’s Master Trust held £14.7bn, clear of the £10bn floor but with real growth still needed to reach £25bn by 2035. Aon’s Master Trust default stood at £7.1bn and Cushon’s at £3.3bn, albeit growing fast, up 716% over six years. Both figures are default-arrangement assets rather than total DC assets, and Aon is comfortably past £10bn on the wider measure, so it is worth asking a provider which number it is quoting. Cushon is also no longer NatWest’s: WTW completed its acquisition on 5 May 2026 and now reports it at £4.2bn inside a combined master trust book of more than £30bn, which is itself a fair illustration of how this market is consolidating. None of this is a verdict on any provider’s quality today. A scheme well short of £25bn can be entirely fit for purpose for a client now. The question is where that scheme, and a client’s members’ money, will sit once 2030 arrives.

What’s In Scope, and What Isn’t

The test applies to the main-scale default arrangement of multi-employer DC schemes used for auto-enrolment, in practice master trusts and GPPs. A single-employer DC trust isn’t itself subject to the £25bn test; the legislation targets the multi-employer market most employers already use. Remember too that GPPs sit under FCA regulation as contract-based arrangements rather than tPR-regulated trusts, even though the £25bn test applies to both. The distinction matters for how a client’s provider is supervised, not for whether the scale test bites.

That doesn’t make the single-employer route a way of avoiding this conversation. Most employers still running their own trust are already weighing consolidation into a master trust for cost and governance reasons that predate this Act, and the scale test simply sharpens which master trust or GPP is the sensible destination once they move. Confirm exactly which arrangement a client sits in, too. A single provider group can run more than one default, and a client’s real holding may be in a legacy fund that is smaller and slower-growing than the flagship default behind a provider’s headline AUM figure.

What It Means for Advisers

This is due diligence to do now, not in 2029. When you next review a client’s scheme, ask the provider directly which pathway its main-scale default is on: already past £25bn, on the Transition Pathway with a published growth plan, or reliant on the Innovation Pathway or a tPR exemption. Build that answer into new business selection alongside cost and investment strategy; a provider still explaining its consolidation plan in 2029 leaves a client little room to move before 2030 if that plan falls short.

Factor procurement timelines in too. Moving a scheme’s default arrangement, or replacing a provider outright, is not a same-quarter decision once member communications, employer consent and payroll integration are accounted for, which is exactly why 2029 due diligence is too late. Where a client already sits with a provider clearly behind the pace, don’t wait for the regulations to force the question. Raise it at the next scheme review, with the same rigour you would bring to a fund performance concern. On the terms of this Act, a provider that can’t scale is not a safe long-term home.

Things to reflect on for CPD

  • Which of your workplace pension clients’ current master trust or GPP provider have you actually checked against the £25bn threshold, and when did you last do it?
  • How would you build a provider’s Transition Pathway progress, or lack of one, into your next scheme review alongside cost and investment strategy?
  • If a client’s provider is relying on the Innovation Pathway or a tPR exemption rather than scale, what evidence would you want to see before recommending they stay?
  • For clients still running a single-employer trust, how does the scale test change which master trust or GPP you’d recommend for consolidation?