It is almost a year to the day since Chancellor Rachel Reeves used her first Mansion House address, delivered on 14 November 2024, to reaffirm and extend the framework first sealed under Jeremy Hunt eighteen months earlier. With the second anniversary of the original Mansion House Compact approaching next month, the United Kingdom’s largest defined-contribution (DC) pension providers find themselves halfway through a five-year window in which they have publicly committed to allocate at least five per cent of default-fund assets to unlisted equities, including UK growth companies. Twelve months on from the Reeves reset, the picture in late April 2026 is one of incremental progress, persistent friction, and a policy still trying to bend a £2.4 trillion pensions market towards British technology and infrastructure.
From Compact to Accord: what was actually committed
The original Mansion House Compact, announced by then-Chancellor Jeremy Hunt on 10 May 2023, brought together nine large DC providers — Aviva, Scottish Widows, Legal & General, Aegon, Phoenix, Mercer, M&G, Nest and Smart Pension — around a non-binding pledge to allocate up to five per cent of default-fund assets to unlisted equities by 2030. Between them, the signatories accounted for the overwhelming majority of UK workplace DC default money, a pool the Association of British Insurers has subsequently described as worth around £170 billion in scope of the Compact.
Reeves’s November 2024 Mansion House speech accepted the Compact in spirit and layered on top of it the findings of the Pensions Investment Review’s interim report, which placed pension scale, consolidation and value-for-money front and centre. The Treasury made clear that the policy ambition had widened: providers would be encouraged not only to lift unlisted-equity allocations in line with the Compact, but to direct a meaningful share of those allocations specifically to UK growth assets. According to HM Treasury’s own briefing at the time, the goal was to channel “tens of billions of pounds” of additional pension capital into British infrastructure, scale-up equity and venture funds over the second half of the decade.
Where the money has actually moved
Industry data suggests the wheel is turning, slowly. The British Private Equity and Venture Capital Association (BVCA), in submissions to the Pensions Investment Review during 2025, estimated that DC default-fund allocations to unlisted equities had risen from below one per cent at the time of the Compact to a directional range of one-and-a-half to two per cent by the end of 2025. The bulk of that uplift has gone to diversified global private equity and infrastructure, with single-digit slivers reaching domestic UK venture and growth managers.
Named beneficiaries cited in provider disclosures over the past twelve months include later-stage rounds led by BGF, Octopus Ventures and Molten Ventures, as well as listed-infrastructure plays funnelled through Schroders Greencoat and Pantheon. Aviva and Phoenix have publicly highlighted UK-focused private-debt and real-asset funds in their default strategies, while Legal & General has used its private-markets platform to seed positions in UK life sciences and clean-energy growth managers. The proportion of pension capital reaching genuinely small, illiquid British scale-ups, however, remains modest — a point conceded by signatories in their year-two progress reports to the Department for Work and Pensions.
The LGPS megafund deadline and the next leg
If the Compact is the slow-burn reform, the parallel transformation of the Local Government Pension Scheme (LGPS) is its noisier cousin. The Treasury’s response to the Pensions Investment Review, published in 2025, asked the eight English and Welsh LGPS asset pools — Border to Coast, LPPI, Brunel, ACCESS, LGPS Central, Wales Pension Partnership, Northern LGPS and London CIV — to consolidate further so that each managed at least £25 billion to £50 billion. By the policy milestone of March 2026, every pool had crossed the £25 billion threshold, and several were operating well above £50 billion, according to Department for Levelling Up, Housing and Communities successor data now held by the Ministry of Housing, Communities and Local Government.
The more consequential change for British growth capital is the parallel expectation that LGPS pools allocate up to ten per cent of assets to UK private markets, with reporting expected to be put on a statutory footing through the Pension Schemes Bill, which industry lobbyists expect to reach the Commons before the end of 2026. The Pensions and Lifetime Savings Association has noted that, even on conservative assumptions, a fully phased ten-per-cent UK private-markets target across the £400 billion-plus LGPS would represent a long-term commitment of around £40 billion of new patient capital available to British infrastructure, housing and growth equity.
A cautious verdict
A year into the Reeves reset, the numbers prove that pension capital reallocation is real but slow. Industry argues the binding constraint is not appetite but pipeline: too few UK growth deals exist at the scale, governance maturity and risk profile that £100 billion-plus DC providers can underwrite at any speed. Treasury officials, in turn, point to a deepening pipeline of regulated investment vehicles and government co-investment platforms intended to bridge that gap. Whether the second half of the decade delivers the genuine step-change in British growth funding that ministers have promised will, in the end, be measured not in pledges signed in the Mansion House but in capital actually deployed on the ground.
Discussion
Sign in to join the discussion.
No comments yet. Be the first to share your thoughts.