Call for Mandated Domestic Investment
More than 250 UK business leaders have formally urged Chancellor Rachel Reeves to implement a mandate requiring pension funds to invest a minimum of 25% of their equity holdings in UK companies. This significant call was made in a letter sent to the Chancellor on Thursday, November 6, 2025, ahead of her anticipated Budget speech on November 26, 2025.
The business leaders contend that such a policy could inject an estimated £95 billion in private investment into the domestic economy. They highlighted a stark decline in pension investment in UK-listed companies, which has plummeted from 53% of total equity holdings in 1997 to just 4% in the current year. The signatories argue that this mandate would provide UK businesses with more profound and reliable sources of capital, while also aligning with public sentiment.
Key Proponents and Context
The initiative was coordinated by the London Stock Exchange Group (LSEG), with David Schwimmer, CEO of LSEG, identified as a key figure. Prominent signatories to the letter include executives from major companies such as Revolut, JD Sports, Barclays, Schroders, and Mulberry, among others.
This latest appeal builds upon previous government efforts to boost domestic investment. Chancellor Reeves has already championed initiatives like the Sterling 20 (launched in October 2025) and the Mansion House Accord (agreed in May 2025). The Mansion House Accord saw 17 pension providers voluntarily commit to investing at least 10% of their workplace pension assets in private markets by 2030, with half of that allocation (5%) directed towards UK private markets. The current demand for a 25% mandate signifies a push for the government to 'go further' than these existing agreements.
Government Stance and Industry Concerns
The government has previously indicated a 'reserve power' within the Pension Schemes Bill, which would allow it to mandate investment if the industry fails to meet voluntary targets. However, Chancellor Reeves has stated that she does not believe mandation would be necessary if voluntary agreements are fulfilled. Despite this, concerns persist within the pensions industry regarding the potential for mandated investments to conflict with fiduciary duties, which require pension fund managers to act in the best financial interests of their members.
The proposed 25% allocation is projected to significantly increase investment in UK equities, potentially by between £76 billion and £95 billion by 2030, according to analysis. The upcoming Budget speech on November 26 is expected to include further initiatives aimed at stimulating investment.
7 Comments
Muchacha
About time pensions supported our national industry.
Eric Cartman
It's good to see efforts to support UK industry and provide capital, especially given the low current investment levels. But we must be careful not to create an artificial market that could lead to complacency or less competitive returns compared to a globally diversified portfolio.
Kyle Broflovski
This will hurt diversification and risk management.
Habibi
Finally, a smart move to boost our own economy!
Stan Marsh
Injecting £95 billion into the UK economy sounds very appealing and could create jobs and growth. Yet, forcing funds to invest locally could limit their ability to seek the best global opportunities, which is vital for long-term pension performance.
Donatello
While boosting UK businesses is important for the economy, mandating investments could compromise pension fund managers' fiduciary duty to their members, potentially leading to suboptimal returns. We need to find a way to encourage domestic investment without forcing it.
Michelangelo
Pensioners' returns will suffer under this.