Key Takeaways
- • Seventeen workplace pension providers managing around 90 percent of active savers' defined contribution pensions will sign the Mansion House Accord on 13 May 2025, pledging to invest 10 percent of workplace portfolios in growth assets such as infrastructure, property and private equity by 2030.
- • At least 5 percent of those portfolios will be ringfenced for the UK, which the government estimates could release £25 billion directly into the UK economy by 2030, within an overall investment unlock of up to £50 billion.
- • The Accord doubles the 2023 Mansion House Compact target from 5 percent to 10 percent and widens participation to most of the workplace DC industry, with signatories holding £252 billion of assets subject to the pledge, potentially rising to around £740 billion by 2030 per the government's estimate.
- • The commitment precedes the final Pensions Investment Review report, which will tackle fragmentation and push pension consolidation into megafunds to scale private markets investment.
- • Industry bodies ABI and PLSA welcomed the Accord, but Trustees and providers flagged that value-for-money rules and limited annual management charge headroom for investment fees remain key hurdles.
Summary
Up to £50 billion of investment for UK businesses and major infrastructure projects is set to be unlocked through the Mansion House Accord, a new agreement between the government and Britain's largest workplace pension providers, according to HM Treasury. Seventeen providers, including Aegon, Aon, Aviva, Legal & General, M&G, Mercer, NatWest Cushon, Nest, Phoenix Group, Royal London, the People's Pension and the Universities Superannuation Scheme, are scheduled to sign the Accord at a roundtable with Chancellor Rachel Reeves and Pensions Minister Torsten Bell in the City of London. The signatories manage around 90 percent of active savers' defined contribution pensions.
Under the Accord, signatories pledge to invest 10 percent of their workplace portfolios in productive assets such as infrastructure, property and private equity by 2030, with at least 5 percent ringfenced for the UK. The government estimates this could release £25 billion directly into the UK economy by 2030. The commitment targets clean energy infrastructure, growth finance for science and technology firms, and innovative small businesses. The government's cash estimates are indicative and assume current private market investment of 3.5 percent of assets, of which 40 percent is UK-based, rising to 10 percent and 50 percent respectively by 2030. Some providers have indicated privately they may exceed these targets.
The Accord goes further than the 2023 Mansion House Compact, under which eleven funds committed to investing 5 percent of workplace DC default funds in unlisted companies by 2030. The Treasury said the new commitment covers the vast majority of the industry, brings more assets into scope and adds a specific UK allocation. The government also cited a 2024 Government Actuary Department analysis finding that portfolios with greater private markets exposure delivered stronger returns than baseline portfolios dominated by overseas equities.
The pledge will be reinforced by measures in the final Pensions Investment Review report, expected in spring 2025, which will push consolidation into megafunds similar to those in Australia and Canada. Separately, the British Business Bank has received FCA approval to deliver the British Growth Partnership, giving UK pension funds and other institutional investors access to its venture capital pipeline. Phoenix Group noted its Future Growth Capital vehicle has committed £2.5 billion over three years to UK growth companies.
Industry reaction was supportive but conditional. The ABI's Yvonne Braun called for government help in building a pipeline of suitable opportunities, while TPT Retirement Solutions' David Lane said provider pricing leaves little room in annual management charges for investment fees and urged a value-for-money approach focused on net returns. The PLSA's Zoe Alexander said the Accord reflects the DC sector's confidence in UK opportunities, consistent with fiduciary duty. The Accord is voluntary and is jointly led by the ABI, City of London Corporation and PLSA.
Under the Accord, signatories pledge to invest 10 percent of their workplace portfolios in productive assets such as infrastructure, property and private equity by 2030, with at least 5 percent ringfenced for the UK. The government estimates this could release £25 billion directly into the UK economy by 2030. The commitment targets clean energy infrastructure, growth finance for science and technology firms, and innovative small businesses. The government's cash estimates are indicative and assume current private market investment of 3.5 percent of assets, of which 40 percent is UK-based, rising to 10 percent and 50 percent respectively by 2030. Some providers have indicated privately they may exceed these targets.
The Accord goes further than the 2023 Mansion House Compact, under which eleven funds committed to investing 5 percent of workplace DC default funds in unlisted companies by 2030. The Treasury said the new commitment covers the vast majority of the industry, brings more assets into scope and adds a specific UK allocation. The government also cited a 2024 Government Actuary Department analysis finding that portfolios with greater private markets exposure delivered stronger returns than baseline portfolios dominated by overseas equities.
The pledge will be reinforced by measures in the final Pensions Investment Review report, expected in spring 2025, which will push consolidation into megafunds similar to those in Australia and Canada. Separately, the British Business Bank has received FCA approval to deliver the British Growth Partnership, giving UK pension funds and other institutional investors access to its venture capital pipeline. Phoenix Group noted its Future Growth Capital vehicle has committed £2.5 billion over three years to UK growth companies.
Industry reaction was supportive but conditional. The ABI's Yvonne Braun called for government help in building a pipeline of suitable opportunities, while TPT Retirement Solutions' David Lane said provider pricing leaves little room in annual management charges for investment fees and urged a value-for-money approach focused on net returns. The PLSA's Zoe Alexander said the Accord reflects the DC sector's confidence in UK opportunities, consistent with fiduciary duty. The Accord is voluntary and is jointly led by the ABI, City of London Corporation and PLSA.
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