The introduction of the quasi-compulsory National Employment Savings Trust (NEST) in 2012 signals a massive change in the UK pension system, involving a move from defined benefits, to a defined contribution scheme. In a defined contribution scheme individuals are responsible for building up their own pension fund to provide an income during retirement.

Research conducted by Professor Ian Tonks at the University of Bath and Dr Edmund Cannon at the University of Bristol, has assessed the likely performance of defined contribution pension schemes, and the associated risks that individuals will face as a consequence. To inform their analysis they used international historical investment returns and wage growth data (1901-2007) to calculate hypothetical retirement incomes in sixteen countries. They conclude that the downside risks to the individual in such schemes are considerable.