What is a master trust?

Since pension auto-enrolment began in 2012, millions of workers have started a pension by auto-enrolling in the workplace scheme, all of which have to be professionally handled to make sure their best interests are protected and their savings grow.

Large firms are able to run their own schemes.

But smaller ones need the help of pension trusts. Of the 1,050 defined contribution single employer trusts only 370 have more than 100 members – a size which makes running them alone a viable proposition.


For the rest their best solution is to join one of the 38 master trusts approved by The Pension Regulator (TPR).

A master trust is a trust-based scheme which brings together a multitude of unassociated employers enabling the to share resources, reduce costs through bulk purchasing of assets.

It also helps compliance with the tighter restrictions being imposed by TPR.


More than 16 million workers have had £385 billion of their savings invested in master trusts to date and the market is still growing.

Analysis by financial research company, Broadridge, estimates that by 2028 assets under management for master trusts will grow to approximately £424 billion, although some weaker and smaller master trusts may fold along the way.


Master trusts are able to provide a good range of options for their member trusts such as low charges, online tools, apps, newsletters, a good range of funds, environmental, social and governance considerations, guidance and access to retirement options.

Expert Emma Douglas said: “Many provide additional guidance and support to help members with their financial wellbeing and equip them to make better-informed decisions on contribution rates, investment options and their income needs in retirement.”


Master trusts are overseen by The Pensions Regulator (TPR) under a stringent set of rules brought in by the authorisation process in October 2018 when applicants had to prove they could meet required standards in five key areas:

  • Fit and proper – All the people who have a significant role in running the scheme can demonstrate that they meet a standard of honesty, integrity and knowledge appropriate to their role.
  • Systems and processes – IT systems enable the scheme to run properly and there are robust processes to administer and govern the scheme.
  • Continuity strategy – There is a plan in place to protect members if something happens that may threaten the existence of the scheme, including how a master trust would be wound up.
  • Scheme funder – Any scheme funder supporting the scheme is a company (or other legal person) and meets the requirement that it only carries out master trust business.
  • Financial sustainability – The scheme has the financial resources to cover running costs and also the cost of winding up the scheme if it fails, without impacting on members.