‘From commitment to deployment: Scaling pension fund investment in the UK economy’, marks the next stage of Pensions UK’s powering pensions work programme, with a focus on how to mobilise pension capital at scale through investable structures, better coordination across public bodies and a regulatory environment that supports long-term value.
UK pension schemes already invest an estimated £1 trillion in the UK across gilts, equities, credit and alternatives. But further growth-focused investment that works for savers can only happen if the system can deliver more pension-grade opportunities, with clear routes to market and appropriate risk-return prospects.
Drawing on evidence from across the pensions landscape, the report maps the UK pension investment system, evaluates four key public finance institutions — the British Business Bank, the National Wealth Fund, Homes England and Great British Energy — and shares case studies from the private sector showing what successful UK investment can look like in practice.
The report is being published a year on from the signing of the Mansion House Accord, a voluntary commitment by 17 of the UK’s largest pension providers which would increase overall investment in unlisted assets, both in the UK and globally. As part of that Accord, Government committed to help build a pipeline of investable opportunities. This report shows there is more work to do.
Key findings
The system remains fragmented – despite significant policy activity, pension schemes still face a complex landscape with unclear coordination, accountability and engagement routes to investing in UK growth assets.
Public finance institutions are at different stages of readiness – the British Business Bank has made the most tangible progress to date in creating an investable route (including through the British Growth Partnership). While other institutions show willingness, there is more work to do and Pensions UK stands ready to support this.
There are successful Private Finance Initiatives that provide lessons – The report highlights successful case studies which showcase the structures and vehicles that work for pension schemes.
Barriers are practical and solvable – Pensions UK members cite insufficient risk-adjusted returns, a lack of suitable opportunities and policy uncertainty as key barriers. Improved pipeline visibility, risk-sharing, and value-focused regulation can unlock further allocations.
The report is accompanied by a separate call to action for Government, regulators, public finance institutions and the pensions industry. It calls for clearer end-to-end pathways that connect pension capital to investable UK opportunities, supported by coordinated Government action, institutions that can bring scalable vehicles to market, and regulation that enables long-term investment decisions focused on value as well as cost.
Zoe Alexander, Executive Director of Policy and Advocacy at Pensions UK, said: “Pension schemes are already major investors in the UK, supporting economic growth – but more practical, co-ordinated action by Government and agencies is needed to support their efforts to keep scaling those investments. Schemes need a diverse range of investable routes that are consistent with fiduciary duty, and deliver good outcomes for savers.
“A year on from the delivery of the Mansion House Accord, this report sets out the practical steps needed so that public finance institutions, regulators and industry can work together to connect long-term pension capital with a clearer, more investable pipeline of UK opportunities.”
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