How blockchain and tokenisation could reshape DC pensions

By creating a more efficient, transparent and connected financial infrastructure, these technologies could help pension schemes access a wider range of assets, reduce operational costs and deliver more personalised outcomes for members. Industry experts explain why the pensions industry should start paying attention now – and assess our members’ views on the likely impact and timeline to adoption.

Introduction

Imagine living in a world where many of the problems levelled at pensions are gone. Pension products and communications are truly tailored to members. People can move their money around quickly. Asset managers and custodians no longer have to carry out time-consuming manual back-office transactions. The barriers to accessing private markets erode.

Blockchain and tokenisation are making that world a reality. These technologies allow assets to talk to each other for the first time. They offer DC pension schemes the opportunity to upgrade their plumbing, creating many new possibilities in the process.

It is easy to dismiss these new technologies by putting them into a certain box. Many people assume that they are high risk, high concept technologies for digital wizards who are amassing and losing wealth in high-stakes games behind computer screens. No wonder some people in the audience at the DCIF’s April 2026 In Depth session on tokenisation and blockchain describe these technologies as ‘scary’ and ‘risky’ in the word cloud above.

However, the reality is quite different. These technologies are interconnected ways to represent and record the presence of assets in the digital ether. They are not inherently high risk or low risk; they are agnostic tools which act as enablers, reducing cost and friction and increasing flexibility at scale for pension schemes, the wider industry, and end investors.

As Nick Cox from Mobius Life explains:

This is a technology which will make our lives less frictional. It will make everything more seamless. There’s going to be a J-curve effect, but I think five to ten years down the line, there will be significant adoption of blockchain technologies.

Nick Cox, Mobius Life

This new technology is best understood when we consider its uses. Because those uses are wide-ranging, let’s consider a selection and put them into the context of what they could mean for different parts of the pensions world.

1For pension schemes

Fractionalisation will make it possible to own slices of assets, making holding illiquid assets more straightforward. Pension schemes have long wrestled with how to own illiquid assets. Fractionalisation may help. One example is a high value building. If you can break ownership into fractions, different investors can own smaller slices. Allan Trimmer, head of alternatives product at Aberdeen, is watching with interest as it evolves. He has seen asset owners creating tokens on New York real estate, allowing them to fractionalise holdings and sell smaller slices to clients.

The key point is it lowers the barrier to access for those assets, which historically have been extremely specialist, because they are highly idiosyncratic and require a high degree of expertise, not just to understand what (for example) real estate is and how it works, but then to understand the specifics of each contract.

Allan Trimmer, Aberdeen

That said, tokenisation is not going to solve the illiquidity conundrum overnight. A large, expensive building can still take a long time to sell – and if you own a token, this will not magically morph into a liquid holding. Rather, the hope is that, as more smaller tokens representing chunks of assets like buildings become available, it will be easier to sell them as secondary markets develop.

2For asset managers and custodians

For the investment world, from custodians to investment managers, tokenisation could make the trading ecosystem much more efficient, both from a cost and an operational perspective. Over the years, the industry has built a highly sophisticated and effective set of infrastructure to enable transactions to be completed quickly and at high volumes. However, underneath the surface, there are still a lot of manual interactions taking place.

In some cases, a securities dealer, a custodian and an investment manager are all generating their own books of records and then having to reconcile those books and records back to each other. Blockchain has the potential to take out multiple linkages and inefficiencies within transactions and record-keeping. Smart contracts – which allow deals to be executed automatically when certain contractual standards are met – will also speed up the process.

Lower costs are another possible benefit of tokenisation.

There will be a hybrid moment where we will be operating essentially two tracks, because we will be going through a migration. Think moving from cheques to mobile banking.

Theo Golden, Baillie Gifford

3For the whole pensions and investment sector

Blockchain and tokenisation will improve transparency. These systems are often associated with murky waters, untraceable electronic money chains, and tax avoidance. However, in investment markets, the opposite may often be true. “Instead of a share registry, what you have is a blockchain,” explained Golden. “Now, regulators can see shareholders in real time.” This potentially gives regulators and market participants much greater visibility than traditional systems.

Public blockchains like Ethereum can provide a transparent and tamper-resistant record of how money has moved. “In this context, it is a regulator and compliance officer’s dream, because every transaction is transparent and recorded,” said Cox. Having a clear record of how, when and where a transaction happened will improve transparency, not diminish it.

More recently, investors are starting to look at private blockchains. In private, or ‘permissioned’ blockchains, access is restricted to approved participants. These networks are often operated by a single organisation or a consortium of organisations, allowing greater control over who can view transactions and participate in the network.

So, while many of the largest blockchain networks are generally public, we may see institutions increasingly use permissioned infrastructure to meet privacy, regulatory and governance requirements.

4For pension scheme members

This technology could help the pensions industry to provide a truly personalised service. Allan Trimmer says: “The next generation of pension investors are probably more likely to have a digital wallet than a traditional ISA savings product. Looking forward, the young people of today will want to engage with pensions through digital wallets, so that’s something to think about going forward.”

“We talk a really good talk as a sector about helping people through the later stages of life, but ultimately we put people in buckets,” adds Theo Golden. He continues:

What we are able to do with this technology is tailor. What I am really excited about, particularly in the pensions context, is that we are going to be able to deliver at scale, rather than at significant cost, a personalised service to people as they move from saving to drawing down. That for me is the really important piece and the call to action is very simple.

We have a fiduciary duty to them to be where they are saving and get them the assets they need to retire. We need to educate them on that journey. As master trusts, managers and the industry, we need to be adopting this technology, bringing our risk-controlled processes to the market, to take them on the journey together.

Theo Golden, Baillie Gifford

What does the future hold?

From the back office to member communications, blockchain and tokenisation have the potential to transform the industry. The future is exciting. “In some ways, it is similar to the move to cloud computing,” says Nick Cox. “Everyone was nervous – and then it happened and now everything is in the cloud, and we don’t think about it.”

In my view, the future of finance is simply a shift from reconciliation to automation.

Theo Golden, Baillie Gifford

Golden continues: “Where we will see value add across the stack is, as assets start to talk to each other more, we will be able to provide better access to assets which haven’t usually been available to a host of clients. This could provide more liquidity but most importantly, better financial outcomes.”

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View from DCIF members: overcoming adoption hurdles

We also gauged some industry views across consultancies, pension funds and asset managers on the timeline and potential impact of blockchain on the industry. The responses underlined a cautious optimism about adoption and outcomes across the broad range of stakeholders.

Key findings at a glance

• 67%anticipate a significant improvement from blockchain
• 83%think it could contribute to value for money to a moderate or great extent
• 3–5years is the consensus adoption window, cited by more than three quarters
• 100%of those selecting areas of innovation highlighted tokenisation and smart contracts
• 50%cited cost and implementation complexity, and the same share cited limited standards and interoperability
• 33%cited a lack of trustee or sponsor understanding

Benefits expected across the value chain

The majority believe trustees and asset owners, and asset managers, will be affected. Interestingly, respondents believe member benefits may be indirect initially: 50% see the platform and administration layer, and cost, as a key area for blockchain, suggesting members may experience the technology through lower costs, greater transparency, liquidity or improved investment access rather than interacting directly with blockchain.

In summary: the reaction is positive but pragmatic. Most expect relatively imminent adoption within three to five years, while the majority believe blockchain could deliver a significant improvement. However, integration with incumbent infrastructure, clearer regulation, and stronger trustee understanding will determine the speed of adoption.

Rising to the challenge

The technology offers new ways to address some of the pensions industry’s longstanding challenges, from improving access to illiquid assets and reducing operational complexity to improving transparency and enhancing personalisation.

The transition will not happen overnight. As with any major technological shift, there will be costs, regulatory questions and a period where old and new systems operate side by side. Yet the potential benefits are difficult to ignore. If assets can be represented, exchanged and managed more efficiently, pension schemes may be able to spend less time on administration and more time focusing on member outcomes.

For an industry built around delivering long-term value, that is a compelling prospect. The real question is no longer whether blockchain and tokenisation will influence pensions, but how quickly the sector will adapt to the opportunities they create.