Pensions UK says the focus must now shift from headline commitments to the practical mechanics of deploying long-term capital into UK venture, infrastructure and growth assets.
A year after the Mansion House Accord sought to unlock billions of pounds of pension capital for private markets, the UK pensions industry is warning that political ambition still risks outrunning practical delivery.
A new report from Pensions UK argues that the debate has now moved beyond securing commitments from pension schemes and towards a more difficult question: whether the UK’s investment system is capable of turning those commitments into scalable allocations to private markets, infrastructure and growth assets.
The report, 2030 Ready: From commitment to deployment, focuses heavily on the mechanisms required to channel long-term institutional capital into areas including venture capital, infrastructure, housing and energy transition projects. While the industry body says appetite for UK investment exists, it argues that structural barriers continue to limit deployment. “The core challenge is not intent, but delivery,” the report states.
That reflects a broader shift in the Mansion House debate. Over the past two years, political pressure on pension schemes to invest more domestically has intensified, culminating in the Accord being signed in 2025 by 17 workplace pension providers. Under the voluntary agreement signatories committed, subject to fiduciary duty and suitable conditions, to allocate at least 10% of default funds to private markets by 2030, with 5% targeted at UK assets.
For Pensions UK, however, the harder phase is only just beginning. The organisation argues that the UK still lacks the “pension-grade” investment ecosystem required to absorb capital at scale. While the Government has launched a series of initiatives intended to support domestic investment – including the National Wealth Fund, planning reforms, industrial strategy initiatives and the British Business Bank’s British Growth Partnership – the report argues that the landscape remains fragmented and difficult for schemes to navigate.
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“Unlocking UK investment is not about creating demand, but about fixing the system that sits between capital and opportunity,” the report says.
The analysis is notable for shifting the conversation away from ideology and towards market mechanics. Rather than questioning whether pension schemes are willing to invest in UK productive finance, the report focuses on the practical barriers preventing them from doing so.
According to a survey of Pensions UK members, the most significant constraints remain insufficient risk-adjusted returns, a lack of suitable investment opportunities and continuing policy uncertainty.
The report also argues that policymakers often misunderstand how pension capital operates in practice. “Pension schemes are not a single, homogeneous pool of capital,” it states, pointing to differences in governance, liquidity requirements, fee sensitivity and in-house investment capability across schemes.
That distinction matters particularly in private markets, where access routes, governance structures and scale requirements vary significantly between venture capital, infrastructure, private equity and real assets.
One of the report’s central themes is that creating workable investment structures may now be more important than generating political momentum.
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.”
The British Business Bank emerges as the clearest example of progress on that front. Pensions UK describes the BBB as having made “the most tangible progress to date in developing an investable route for large pension schemes”.
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The report highlights the British Growth Partnership – launched last year to crowd pension capital into UK venture and growth businesses – as an example of how public institutions can create pension-compatible vehicles with institutional governance and diversified exposure.
That matters because venture capital has historically remained difficult for many pension schemes to access directly due to issues around scale, risk concentration, due diligence requirements and illiquidity.
By contrast, the report is more cautious on the National Wealth Fund. While schemes see significant potential in infrastructure and clean energy investment, Pensions UK argues that many opportunities remain difficult to access in practice because structures are still geared too heavily towards direct investment rather than pooled pension-friendly vehicles.
The same challenge applies more broadly across the government’s growth agenda. The report repeatedly stresses that announcements alone are insufficient without repeatable investment pathways capable of accommodating long-term institutional capital.
Paul Forshaw, chief executive of Future Growth Capital, said the focus now needed to shift towards the investment infrastructure underpinning UK growth allocations. “Attention now must be focused on evolving market structures to support investment into UK growth at scale,” he said.
Forshaw added that momentum was building across the pensions investment industry around creating more effective access routes into the UK private economy, including through structures such as LTAFs.
That reflects a broader institutionalisation trend now emerging across UK private markets. The focus of policymakers had been primarily on persuading pension schemes to consider domestic productive finance. Increasingly, the debate is turning instead towards how private market exposure can be packaged, governed and scaled appropriately for defined contribution pensions.
The report places significant emphasis on issues including fee structures, pooled vehicles, capability constraints and value-for-money regulation. It argues that the industry must continue moving away from a narrow focus on cost and towards a framework centred on long-term net returns and member outcomes.
Forshaw argued that the opportunity set itself was already substantial. “The UK’s private economy is the engine of future growth,” he said.
Whether pension schemes allocate at the pace envisioned under the Mansion House reforms may depend less on political pressure than on whether government, regulators and private markets managers can collectively build the structures capable of absorbing capital efficiently.
A year on from the Accord, the industry’s message appears increasingly clear: the willingness to invest is there, but the plumbing remains unfinished.