The Mansion House Accord is a “slow-motion hijacking” of UK pensions, putting millions of people’s pensions at risk, warns deVere Group CEO Nigel Green.
The Mansion House Accord is designed to mobilise substantial investments for the UK market, with pension providers committed to investing 10% of their defined contribution default pension funds into private markets by 2030, with at least half of that directed towards the UK.
However, Green said the Government is using retirement savings to “bankroll political growth narratives” with little transparency or accountability.
He said: “This is a slow-motion hijacking of UK pensions. Rachel Reeves and the Government are pushing the country’s retirement funds into riskier investments to prop up political and economic headlines, not to protect retirees.”
Around £4.8 trillion is currently held in UK pensions. With around 90% of savers in default schemes, Green said the policy means that hundreds of billions of pounds are already being repositioned without most people’s knowledge or consent.
Green warned that private markets come with greater illiquidity, lower transparency, higher management fees and less frequent valuations than publicly listed investments.
“The Accord has been spun as modern and progressive. But in reality, it exploits public financial disengagement. The Government knows most people don’t actively choose their pension investments, so they’re using that apathy to force through policy via the back door,” he said.
He also argued that the policy’s UK-first mandate further restricts diversification.
“Half of the new private market allocation must be invested domestically, even if global alternatives offer stronger returns or better risk profile. This isn’t about maximising retirement income. It’s about forcing capital into the UK economy to cover up deeper issues; sluggish growth, overregulation and stagnant productivity.”
Green said cost was another concern, with private market funds carrying fees as high as 3% compared to under 0.5% for many public market index funds, which he said could erase tens of thousands of pounds from someone’s final pension pot.
“The Mansion House Accord turns default savers into silent financiers of political ambition. It’s financial sleight of hand on a national scale.”
deVere is urging savers to take back control, noting that investors can opt out of default schemes and move to more globally diversified, lower-cost and more transparent funds that better suit their goals and risk tolerance.
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