Workplace savers could see their pension outcomes improve as 17 of the largest UK workplace pension providers have signed the Mansion House Accord.
Under the agreement, pension providers plan to invest at least 10 percent of their defined contribution (DC) default funds in private markets by 2030, with half of that specifically allocated to the UK.
The voluntary agreement is intended to boost financial outcomes for savers and support UK growth. The total amount of pension assets within the parameters the agreement is £252 billion. This is expected to increase over the accord’s lifetime.
The news comes as research shows that pension savers say they want more of their money invested in the UK.
Rachel Reeves, Chancellor of the Exchequer, said: “Through our Plan for Change, we are choosing to back British businesses and British workers. I welcome this bold step by some of our biggest pension funds, which will unlock billions for major infrastructure, clean energy, and exciting startups — delivering growth, boosting pension pots, and giving working people greater security in retirement.”
Torsten Bell, Minister for Pensions, said: “Pensions matter hugely, they underpin not just the retirements we all look forward to, but the investment our future prosperity depends on. I hugely welcome the pensions industry decision to invest in more productive assets, from growing companies to infrastructure. This supports better outcomes for savers and faster growth for Britain.”
The accord, jointly led by the Association of British Insurers (ABI), the Pensions and Lifetime Savings Association (PLSA) and the City of London Corporation, is part of ongoing efforts to improve retirement outcomes and drive long-term investment in UK growth.
Helen Forrest Hall, chief strategy officer at the industry body the Pension Management Institute (PMI), said: “While commitments and accords signal ambition, the PMI believes that the real test lies in delivering the regulatory and economic conditions that make UK markets genuinely attractive to pension funds.
“For those running UK pension schemes the ultimate responsibility is to act in the best interests of members. Pension funds will invest where opportunities align with long-term value and security.”
Forrest Hall said it is the government’s role to foster an environment where UK investments are viable, competitive, and deliverable. But she said: “Without the right economic conditions, pension funds cannot—and should not—be expected to prioritise UK assets over better-performing alternatives.
“Commitments are easy to sign, delivering the right framework for success is harder. The government must focus on creating the conditions that allow pension funds to act in members’ best interests—ensuring that UK markets are not just an option, but an attractive and sustainable one.”
Aviva Group chief executive officer Amanda Blanc called the accord “a major opportunity” for the pension and investment industry to support UK growth while delivering improved outcomes for pension savers.
“As a significant investor in private markets, Aviva has recently launched a number of funds to give over four million workplace pension customers even greater opportunity to invest in UK assets, including innovative, early-stage businesses, and we want to do much more.”
Research from NatWest Cushon shows that the accord aligns with what savers want.
Its survey of 1,563 UK pension savers found that 52 percent of savers agree that pension funds should invest more in the UK, while just 8 percent disagree. Younger respondents were more likely to want investments in the UK (61 percent of 25–34-year-olds) than older savers.
The provider, which is also an accord signatory, said its research shows that the majority of savers want to see their pensions invested in UK productive assets in a way that promotes a higher standard of living for them in retirement.
The provider highlighted that the accord agreement includes pledges to investment in assets such as high growth private companies and cutting-edge renewable projects such as wind and solar farms. The idea is that these types of investment can not only improve financial outcomes but also positively impact savers’ standards of living in retirement.
Ben Pollard, CEO at NatWest Cushon, said: “The investment case for UK private markets is strong, which is why we are a signatory to the Mansion House Compact and have also signed up to the new Mansion House Accord. But there is another positive angle – reconnecting people with the investments their pension is making. These types of investments are real and tangible and show savers how hard their money is working to improve their standard of living in the UK.
“So it’s really encouraging to see this appetite from pension savers to invest in UK assets, particularly among younger people. That’s exactly the type of customer the industry generally struggles to engage, so it’s fantastic to see that investing further in UK private markets aligns with what they want.”
Accord signatories include: Aegon UK, Aon, Aviva, Legal & General, LifeSight, M&G, Mercer, NatWest Cushon, Nest, now:pensions, Phoenix Group, Royal London, Smart Pension, the People’s Pension, SEI, TPT Retirement Solutions and the Universities Superannuation Scheme (USS).
Two providers were missing from the official statement: Scottish Widows and Hargreaves Lansdown.
