Only 1 in 3 UK pension schemes using fiduciary management has independent oversight, despite regulatory expectations, XPS finds

Only 1 in 3 UK pension schemes using fiduciary management has independent oversight, despite regulatory expectations, XPS finds

02 Feb 2026

Only one in three UK pension schemes using fiduciary management currently has formal, independent oversight in place, despite clear expectations from regulators, according to data compiled by XPS.¹

The proportion of schemes with independent fiduciary oversight has remained stubbornly low and largely unchanged for several years. This is despite ongoing emphasis from The Pensions Regulator and the Competition & Markets Authority on the need for schemes to monitor delegated investment arrangements effectively and independently.

Without independent oversight, trustees and scheme members are heavily reliant on fiduciary managers to assess and report on their own performance, limiting effective challenge and wider market comparison.

In XPS’s latest Investment Briefing, published today, XPS Group offers new perspective on the FM landscape, arguing that the lack of independent oversight is particularly acute among smaller pension schemes, where cost is often cited as a barrier, despite regulatory expectations applying regardless of scheme size.

XPS calls on oversight providers to elevate industry standards by: 

• Being structured so cost is not a barrier to good governance, particularly for schemes with assets below £100m
• Providing clear KPIs, peer benchmarking, fee and terms analysis, and practical, actionable recommendations
• Demonstrating how oversight leads to better governance discipline and decision-making over time

André Kerr, Head of Fiduciary Management Oversight, XPS Group said: “We don’t let students mark their own homework, so why does the industry still allow fiduciary managers to assess their own performance?  We have seen numerous cases where scheme performance has been good despite the fiduciary manager, not because of them. Independent oversight is essential if trustees are to understand whether value is genuinely being added.

With the majority of schemes still lacking formal oversight, there is a growing gap between regulatory intent and what is happening in practice. Fiduciary manager oversight should be treated as a core part of good governance, not an optional extra.”