Global pension assets increased by 9.6 per cent year-on-year to USD 68.3trn in 2025, with defined contribution (DC) assets continuing to drive growth, according to the Thinking Ahead Institute (TAI).

Last year saw sustained recovery across global markets amid strong investor sentiment and relatively contained volatility, the report stated, resulting in an additional USD 6trn of pension asset value.

Among the top seven global pensions markets (Australia, Canada, Japan, the Netherlands, Switzerland, the UK, and the US), DC formed 63 per cent of all assets in 2025.

Australia and the US skewed this figure higher with DC asset allocations of 90 per cent and 72 per cent respectively, followed by Canada with 44 per cent.

The Global Pension Assets Study showed that DC assets had increased by an average of 9.4 per cent a year over the past 10 years.

Looking at the top 22 pension markets (P22), Switzerland, South Korea, and Hong Kong all grew by more than 8 per cent a year over the past decade.

The US remained the largest pension market, forming 66 per cent of the P22 in 2025, while Canada overtook Japan for the first time to become the second largest pensions market following 12 per cent year-on-year growth.

Meanwhile, the UK saw growth of just 1.4 per cent a year over the past 10 years in USD terms, and had the second lowest compound annual growth rate of all 22 major markets after Brazil.

The UK had been the second largest pension market in 2015 but had slipped to fourth place by 2025.

The TAI said a key driver of this trend was that the UK pensions market was going through a structural shift, with DB schemes maturing, paying out benefits, and de-risking.

However, DC pensions continued to expand in the UK, with DC representing around 40 per cent of UK pension assets, up from 18 per cent in 2020.

Looking at the seven largest pensions market over the past 20 years, overall allocation to equities has fallen by 9 percentage points to 48 per cent of total assets, while bonds and other asset classes were up by 3 percentage points and 6 percentage points to 31 per cent and 19 per cent respectively.

“2025 saw broad-based gains across global markets, with most major asset classes delivering positive returns,” commented TAI director, Jessica Gao.

“Equities performed especially well, while fixed income also posted gains in light of global rate cuts and narrowing credit spreads.

“Looking ahead, the 2026 outlook is likely to be shaped by policy decisions, technological innovation and shifting global dynamics.

“Fiscal support and AI-related investment should remain important growth drivers. Inflation trends and central bank actions will be key, particularly in the US, where strong capital spending and supportive fiscal policy may continue to support growth and keep yields relatively elevated.

“Now more than ever, adopting a ‘total portfolio approach’ (TPA) matters because the investment environment is more uncertain, complex and interdependent than the governance models that many funds have relied on.

“Rapid technological change as well as more prominent political and systemic risks demand frameworks that can operate with less certainty and weaker model stability. TPA addresses this by enabling faster, more coordinated decisions supported by better data, technology and an organisation-wide perspective.”

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