Aviva Chief Executive Warns Government Against Forcing Pension Investment in UK Assets

The chief executive of Aviva has issued a stark warning to the government regarding pension investment autonomy, emphasising that investment decisions must remain in the hands of savers rather than being dictated by ministerial mandate.

Dame Amanda Blanc, speaking at The Times CEO Summit, made it clear that companies providing defined contribution workplace plans base their investments on choices made by scheme members. “They have to be the decision-makers; it isn’t for us to decide,” she stated emphatically.

The government’s proposed reforms aim to reinvigorate the domestic economy by encouraging UK schemes to increase their British investments, reversing a decades-long trend of declining domestic exposure. Last month, ministers introduced a reserve power enabling them to mandate funds to purchase specific assets, including British investments.

While Chancellor Rachel Reeves has downplayed the likelihood of using this power, stating “I don’t think we need mandation,” the industry remains concerned about potential conflicts with pension trustees’ fiduciary duties. Dame Amanda’s position was unequivocal: “I think mandation is not the right thing.”

The discussion follows the recent Mansion House accord, where 17 major UK providers, including Aviva, committed to investing at least 10 per cent of their defined contribution default funds in private assets by 2030, with half allocated to UK investments. This agreement is projected to generate £50 billion in additional investment, with £25 billion directed towards British assets.

David Schwimmer, CEO of the London Stock Exchange Group, suggested an alternative approach, proposing that pension tax benefits should be contingent on UK investments. He argued that the current system effectively subsidises investment in foreign markets, particularly the US S&P 500, at the expense of British taxpayers.

The debate highlights a critical juncture for UK pension reform, as the industry grapples with balancing national economic interests against individual investment freedom. With £6 trillion in pension funds, insurance companies, and cash ISAs, the stakes for British economic growth and market development remain substantial.