Mansion House Accord: What It Means for Your Pension

Published 30 March 2026 • 8 min read

The Mansion House Accord is a voluntary agreement between major UK pension providers to invest at least 5% of their default fund assets in unlisted investments — including private equity, venture capital, and infrastructure. The goal is to boost returns for pension savers while channelling billions into the UK economy. But what does this actually mean for your workplace pension?

The core commitment: Signatory pension providers have pledged to allocate a minimum of 5% of their default fund assets to unlisted investments by 2030. This covers both UK and international private markets, with the aim of delivering higher long-term returns for members.

Why Does the Accord Exist?

UK defined contribution pension funds have historically invested almost entirely in listed equities and bonds. By contrast, pension funds in countries like Canada and Australia routinely allocate 20–30% to private markets and have delivered significantly higher returns over the past two decades.

The government sees two benefits from encouraging UK pension funds to follow suit:

Better returns for savers — private equity and infrastructure have historically outperformed listed markets over long time horizons, which suits pension funds with decades-long investment periods
Economic growth — directing pension capital toward UK start-ups, scale-ups, and infrastructure projects could help address chronic underinvestment in the domestic economy

Who Has Signed Up?

The Accord has been signed by many of the UK’s largest workplace pension providers, collectively managing hundreds of billions in DC assets. The signatories include both master trusts and contract-based providers that serve millions of auto-enrolled workers.

The agreement is voluntary, not mandatory. However, the government has signalled that it will legislate if providers fail to meet the 5% target by 2030 — giving the Accord a degree of regulatory weight that goes beyond a simple pledge.

How It Could Affect Your Pension

If you are in a workplace defined contribution pension with a default investment fund, the Accord may change how your money is invested over the coming years. Here is what that could look like:

Aspect	Before Accord	After Accord (by 2030)
Unlisted investment allocation	Typically 0–2%	At least 5%
Asset types	Listed equities, bonds, cash	Plus private equity, venture capital, infrastructure
Expected long-term returns	Moderate	Potentially higher (with added illiquidity)
Fees	Lower (passive index funds)	May increase slightly due to private market costs
Transparency	Daily fund pricing	Less frequent valuations for unlisted assets

The Potential Benefits

Higher returns — private equity has historically delivered a premium over listed equities, which could mean a larger pension pot at retirement
Better diversification — unlisted assets do not move in lockstep with stock markets, which can reduce overall portfolio volatility
Access to growth companies — many of the fastest-growing companies now stay private for longer, meaning listed-only funds miss out on early-stage growth
Infrastructure income — investments in roads, renewable energy, and digital infrastructure can provide stable, inflation-linked returns

The Risks and Concerns

Not everyone is convinced: Critics argue that pushing pension funds into illiquid, higher-cost investments could expose savers to new risks — particularly if the primary motivation is economic policy rather than member outcomes.

Higher fees — private market investments cost more to manage than passive index funds, and these costs are ultimately borne by members
Illiquidity risk — unlisted investments cannot be sold quickly, which could create problems during market stress or when members want to transfer pots
Valuation challenges — private assets are valued infrequently and subjectively, making it harder to know the true value of your pension at any given time
Conflict of interest — the government wants pension funds to invest in UK growth for economic reasons, but the best investments for savers may be overseas
Charge cap pressure — the 0.75% auto-enrolment charge cap makes it difficult to include higher-cost private market investments without squeezing net returns

What Should You Do?

For most workplace pension savers, no immediate action is needed. The changes will happen gradually within default funds. However, it is worth being aware of what is changing:

Check your fund factsheet — your pension provider should publish updated asset allocations as they begin incorporating unlisted investments
Understand the fee impact — look for any changes to annual management charges. A small fee increase may be justified if net returns improve
Consider your time horizon — if you are close to retirement, illiquid investments may not be appropriate. Most providers will reduce private market exposure as you approach your target retirement date
Review your overall strategy — if you have multiple pension pots, a pension adviser can help you assess whether your combined portfolio is well-diversified

Want to understand how the Accord affects your pension? A pension adviser can review your current workplace scheme and help you decide whether the default fund is still right for your goals. Get matched for free →

Key Takeaways

The Mansion House Accord commits major UK pension providers to invest at least 5% in unlisted assets by 2030
The aim is to boost pension returns and direct capital into UK economic growth
Potential benefits include higher long-term returns and better diversification
Risks include higher fees, illiquidity, and valuation challenges
Most savers do not need to take action, but should monitor fee changes and asset allocation updates from their provider