Britain's Mansion House Accord, the voluntary pledge by workplace pension providers to redirect billions of pounds toward UK assets, passed its first anniversary in May with early signs that the commitment is beginning to move markets. Seventeen providers, representing the bulk of the UK's defined-contribution pension market, signed the Accord in May 2025 under pressure from the Treasury to shift retirement savings away from overseas index trackers and into domestic equities, infrastructure and private markets. A year on, fund managers and the Pensions and Lifetime Savings Association (PLSA) say the first tranche of that capital has started reaching London-listed small and mid-cap companies, though the scale so far remains modest against the Accord's 2030 targets.
The Accord commits signatories to invest at least 10 per cent of their default defined-contribution funds in private markets by 2030, with at least 5 per cent of total assets earmarked specifically for UK opportunities. Among the seventeen signatories are Aviva, Legal & General, M&G, Aegon, Fidelity International, Phoenix Group, Royal London, Scottish Widows, NEST and The People's Pension. Unlike its 2023 predecessor, the Mansion House Compact, which focused narrowly on unlisted equities, the 2025 Accord widened the remit to include listed UK small and mid-caps, private credit and infrastructure debt — a change providers said gave them room to buy shares already trading on the London Stock Exchange rather than wait for new unlisted deal flow to materialise.
Where the money has gone so far
Legal & General and Aviva have both confirmed increased allocations to FTSE 250 constituents inside their default growth funds over the past twelve months, according to statements accompanying their most recent annual reports. Separately, Smart Pension and NEST — the two providers managing the largest pools of auto-enrolment savings — have flagged new mandates covering UK infrastructure debt and mid-cap equities. None of the signatories has published a single consolidated figure for total new UK equity purchases under the Accord, and the PLSA says a full progress audit will not appear until the Accord's formal review point in 2027.
Small and mid-caps still trade cheap
The FTSE 250, more heavily weighted toward domestically-focused businesses than the export-heavy FTSE 100, has traded at a discount to its long-run average valuation for much of the period since the 2022 gilt-market turmoil under then-chancellor Kwasi Kwarteng. According to fund managers at several signatory firms, that valuation gap is one reason UK mid-caps became an early destination for the new mandates — buying already-cheap, liquid, London-listed shares is simply easier to execute than sourcing unlisted deals from scratch. Not every signatory has moved at the same pace, however; some smaller providers have told the Treasury they need more time to renegotiate mandates with external asset managers before committing meaningful sums.
The Treasury has said it will decide by the end of 2027 whether participation should move from voluntary to mandatory if allocations fall short of the Accord's targets — a threat several pension-industry figures have described privately as the real driver behind this year's early moves.