Key Takeaways
- • Seventeen major UK workplace pension providers have committed to invest at least 10% of defined contribution (DC) default funds in private markets by 2030, with a minimum 5% allocation to UK private markets, under the voluntary Mansion House Accord initiative.
- • The accord covers £252 billion in pension assets currently under management, expected to grow over the initiative's lifetime, with potential to unlock £25–£50 billion in total investment for the UK economy.
- • Signatories include industry giants Aegon UK, Aviva, Legal & General, Nest, Phoenix Group, Royal London, USS, and 10 others, jointly coordinated by the Association of British Insurers (ABI), Pensions and Lifetime Savings Association (PLSA), and City of London Corporation.
- • The commitment is structured to improve retirement outcomes for DC savers through higher potential net returns available in private markets while simultaneously channeling capital into UK business and infrastructure projects.
- • Implementation is contingent on government and regulatory enablers; commitments remain subject to fiduciary duty and Consumer Duty obligations.
Summary
The UK pension industry has formalized a landmark voluntary accord aimed at redirecting significant capital toward private markets and domestic investment. Announced on May 12, 2025, the Mansion House Accord represents a coordinated commitment from 17 of the largest workplace pension providers to allocate at least 10% of their defined contribution default fund portfolios to private markets by 2030, with a floor of 5% directed specifically to UK private markets.
The initiative encompasses £252 billion in current pension assets, a figure the industry expects to expand throughout the accord's lifetime. According to the City of London Corporation and supporting industry bodies, the arrangement could unlock between £25 billion and £50 billion in total investment for the UK economy, with direct applications to business growth and infrastructure development. The stated dual objective is to enhance retirement outcomes for savers through superior net returns typically available in private markets, while simultaneously addressing capital formation gaps in the UK economy.
The signatories represent a comprehensive cross-section of the UK pension landscape, including 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 Universities Superannuation Scheme (USS). The accord has been jointly led by the Association of British Insurers (ABI), the Pensions and Lifetime Savings Association (PLSA), and the City of London Corporation, reflecting broad industry and regulatory consensus.
Critically, all commitments remain subject to fiduciary duty and the Consumer Duty regulatory framework, and implementation depends on the Government and regulators delivering specified enablers. This conditionality reflects the complex regulatory environment governing UK pension fund management and the need for alignment between voluntary industry initiatives and statutory obligations to beneficiaries.
The initiative encompasses £252 billion in current pension assets, a figure the industry expects to expand throughout the accord's lifetime. According to the City of London Corporation and supporting industry bodies, the arrangement could unlock between £25 billion and £50 billion in total investment for the UK economy, with direct applications to business growth and infrastructure development. The stated dual objective is to enhance retirement outcomes for savers through superior net returns typically available in private markets, while simultaneously addressing capital formation gaps in the UK economy.
The signatories represent a comprehensive cross-section of the UK pension landscape, including 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 Universities Superannuation Scheme (USS). The accord has been jointly led by the Association of British Insurers (ABI), the Pensions and Lifetime Savings Association (PLSA), and the City of London Corporation, reflecting broad industry and regulatory consensus.
Critically, all commitments remain subject to fiduciary duty and the Consumer Duty regulatory framework, and implementation depends on the Government and regulators delivering specified enablers. This conditionality reflects the complex regulatory environment governing UK pension fund management and the need for alignment between voluntary industry initiatives and statutory obligations to beneficiaries.
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