De-risking continues to be the dominant theme in the asset allocation strategies of UK defined benefit (DB) pension schemes, according to Aon’s Global Pension Risk Survey 2025/26.
This year’s survey highlights that the proportion of DB schemes aiming for buyout as soon as it is affordable has decreased slightly from 2023, falling from 55% to 52%.
However, schemes targeting run-on has increased from 30% to 40%, with the timescale to achieving the chosen target also reducing to 6.5 years.
“Significant improvements in funding levels since 2022 have led to an increased focus on endgame strategies in the DB pensions industry,” said Rupert Kotowski, associate partner at Aon.
“This, in turn, has led to an increase in the range of available endgame options, from third-party solutions such as superfunds and pension captives to in-scheme options, such as active run-on,” he added. “However, buying out as soon as affordable remains the most popular long-term strategy, with the insurance market remaining buoyant.”
The survey shows that credit, liability driven investment and annuities are again the asset classes where respondents intend to increase allocations.
“This reflects both de-risking, shortening timescales, and risk settlement journeys – but the pace of that change has slowed from two years ago,” said Lucy Barron, partner at Aon. “This is partly due to the extent of de-risking that has already taken place but also to market conditions.”
One trend is for schemes planning to disinvest from illiquid growth assets.
Currently, 42% of schemes expect to reduce their holdings in these assets, a notable rise from 35% in 2023.
Barron said it is likely that this shift is driven by the growing number of schemes preparing for annuity purchases.
However, despite this overall move towards de-risking, there remains a minority – 5% of respondents – that plan to increase their allocations to illiquid growth assets.
This suggests that some schemes, particularly those pursuing a run-on strategy, continue to see value in maintaining or selectively increasing their exposure to illiquids rather than targeting buy-in.
Another factor is a focus on environmental, social and governance (ESG).
At least 50% of equity and credit portfolios now either incorporate an ESG focus, or investors are planning to incorporate an ESG focus for their investments in these asset classes.
“Despite changing priorities in the US, UK respondents still indicated a significant desire to change portfolios to both take advantage of ESG opportunities and to guard against ESG risks,” said Rupert Kotowski.
The trend of schemes delegating investment decision-making continues, with 38% of respondents now doing so through a fiduciary or outsourced chief investment officer (OCIO) model.
Among the remainder, 24% have chosen not to delegate, while 35% have not considered it recently.
The 2025/26 edition of Aon’s Global Pension Risk Survey – published every two years over two decades – charts the actions, intentions and concerns of UK DB pension schemes.
The UK survey had a total of 230 responses, covering both DB and defined contribution schemes, from the relatively small, less than £100m, to the very large, over £10bn.
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