Seventeen major UK pension schemes and providers have pledged to allocate at least 10% of their defined contribution (DC) default funds to private markets by 2030, half of which will be earmarked for investments in UK-based assets. This initiative, the Mansion House Accord, is a collaboration between the Pensions and Lifetime Savings Association (PLSA), the Association of British Insurers (ABI), and the City of London Corporation.
The move is expected to mobilise over £50 billion in capital across the next five years, with £25 billion directly targeted at UK investments. This represents a significant potential capital boost for British businesses, particularly those seeking venture capital or growth equity.
The agreement follows an earlier 2024 pledge, the Mansion House Compact, which revealed UK pension funds held just £800 million in unlisted equity, equating to around 0.36% of their total DC default fund holdings. The new targets aim to substantially improve that figure and bring the UK more in line with international peers regarding private market exposure.
The British Private Equity and Venture Capital Association (BVCA) is using this momentum to lobby for greater inclusion of venture capital in pension fund portfolios, positioning the asset class as capable of delivering strong long-term returns. The group emphasises that much of the benefit from UK innovation is currently being captured by overseas investors and calls for domestic funds to take a more active role in supporting UK growth sectors, including life sciences, AI, and net-zero technologies.
The government has also signalled continued support for reforming pension regulations to help unlock greater capital flows into British scale-ups.
