Santander, Scottish Widows, Fidelity and Hargreaves Lansdown have all declined to back the Mansion House Accord – the Chancellor’s plan to boost growth by encouraging schemes to invest more in UK assets.
The blow comes after a politically fraught moment for the Chancellor, whose emotional appearance in Parliament on Wednesday prompted a market wobble that saw gilt yields spike and the pound fall sharply against the dollar and euro.
But Prime Minister Sir Keir Starmer moved quickly to quash those rumours, saying her tears were unrelated to political tensions and affirming that “she will be Chancellor for a very long time to come”.
Signatories to the accord pledge to invest 10 per cent of their workplace portfolios in assets that boost the economy such as infrastructure, property and private equity by 2030.
Seventeen providers have so far signed up, including big names like Aviva, NatWest Cushon and Royal London, but the absence of key names from the financial services industry has cast a shadow over the initiative’s potential to deliver the scale of domestic investment ministers are hoping for.
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That stance puts it directly at odds with Reeves’s plan to unlock billions in “productive finance” to power a high-growth economy and create more opportunities for British businesses to scale.
James Monk, investment director of workplace investing at Fidelity, said: “We continue to believe that pension schemes must be allowed to direct pension assets in members’ best interests, without a mandatory requirement to invest in specific markets or assets.”
Lloyds Banking Group dealt perhaps the most damaging blow to Reeves’s strategy as its pensions arm, Scottish Widows, is planning a sharp cut to its UK equity exposure, reducing domestic holdings in its default pension fund from 12 per cent to just 3 per cent by early 2026, and even lower in more conservative portfolios.
The decision from the UK’s biggest bank sends a signal that global diversification is still being prioritised by pension managers over Government efforts to re-anchor capital within the domestic economy.
A spokesperson said: “We are currently focusing our discussions on the pensions investment review and how to ensure competition and innovation whilst achieving scale, with client outcomes at the heart of any decisions.
Reeves has insisted the accord is voluntary but has also left the door open to future intervention if the industry does not move fast enough.
The Chancellor said: “Through our Plan for Change, we are choosing to back British businesses and British workers.
She said the commitment from pension funds would unlock “billions for major infrastructure and clean energy.”
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