Around one million individuals will transfer out of their defined benefit (DB) pension schemes in the next 25 years, Hymans Robertson has predicted.
The consultant forecasts, published today (8 February), showed that some 40,000 savers a year will be accessing their pension benefits following the introduction of pension freedoms in 2015.
The volume of defined benefit pension transfers has been soaring, as savers seek to take advantage of sky-high transfer values and to move their nest eggs into defined contribution (DC) schemes in order to access their cash.
HM Revenue & Customs data showed more than £14bn has been unlocked from defined contribution pensions since pension freedoms came into effect.
Hymans Robertson report shows that the number of defined benefit schemes in the UK will shrink to about 1,000 – less than a fifth of current levels - over the next 25 years as defined benefit consolidation, in a whole range of forms, takes off.
This will be as a result of the drive to reduce running costs, improve the security of members' benefits and manage risks more effectively, the firm stated.
According to Jon Hatchett, partner at Hymans Robertson, this consolidation doesn't need legislative change in order to happen.
He said: "It is already happening. Along this road, we will see the popularity of consolidation solutions such as sole trusteeship, defined benefit master trusts, investment platforms and other mid game consolidation vehicles take off.
"We will also see new innovations enter the market, ranging from non-insured risk transfer vehicles to superfunds."
Nevertheless, the government is working on a defined benefit white paper which is expected to bring some legislative changes to this type of pension schemes, due to be published in spring.
Mr Hatchett said: "In terms of the members of these schemes, we could see around one million consolidated into defined benefit master trusts.
"These are already popular in the defined contribution space, but they already exist and are gaining ground in defined benefit too for similar reasons: reducing cost and improving governance.
"Our estimates suggest around two million members will reach the end game and move into the gold standard of consolidation vehicles: buy-outs with insurers."
Along the way, Hymans Robertson is expecting that around another 500,000 members will fall into the Pension Protection Fund (PPF), he said.
Mr Hatchett added: “We are reminded all too often that defined benefit pensions are not 'gold-plated' or 'guaranteed', and there is a real risk for a significant minority that they won't receive their benefits in full.
"We have seen hundreds of schemes enter the PPF, with pain for scheme members, employees and shareholders alike.
"The plight of the Carillion pensioners is a recent high profile reminder of this."
The defined benefit pension schemes of Carillion, one of the UK government's biggest contractors, are all either in the retirement fund of last resort, the PPF, or will soon enter it.
Carillion has 13 final salary schemes in the UK with more than 28,500 members, and a deficit of £587m at the end of July, according to the company's results.