The Pensions Regulator (TPR) is to shift to a more prudential-style of regulation to protect savers from systemic risk.

Nausicca Delfas, CEO of the trust-based pension watchdog, said the change was necessary due to a rapid acceleration in the scale of workplace pension schemes.

She told delegates at an industry conference earlier this week that TPR's modelling shows that in 10 years' time the master trust market will contain schemes of systemically important size.

She said there will be seven schemes with more than £50bn assets under management on a consolidated basis, four of which will be responsible for well over £100bn each.

TPR will evolve its approach in line with Mansion House reforms announced by Chancellor Rachel Reeves earlier this month, to drive growth and scale in the market.

Ms Delfas said: “We are shifting to a more prudential-style of regulation, addressing risks not just at an individual scheme level, but also those risks which impact the wider financial ecosystem.

“We are entering a different era of regulation which protects, enhances and innovates in savers’ interests, so that all savers – from every walk of life – can get good retirement outcomes from pensions.”

TPR will focus its attention on three areas: scheme investments, data quality, and trusteeship.

It also plans to deploy a new regulatory toolkit including a new approach to master trust supervision with tiers of engagement depending on the risks schemes present to the market and saver outcomes

It will also invest in digital, data and technology and embracing new ways of working across the organisation to get a rich evidence base for regulatory action as well as driving efficiency and automation

The watchdog also plans on growing a team of innovation professionals and putting in place a 'pensions market innovation hub' to review ideas at an early stage and to provide guidance to enable safe new product development.