Dame Amanda Blanc, chief executive of Aviva, has warned that giving the government power to force pension funds to invest in UK assets would be a serious misstep, describing such a move as “a sledgehammer to crack a nut”.
Speaking on Thursday, Blanc insisted that defined contribution pensions must be invested in the best interests of individual savers, and that any effort to compel schemes to allocate capital to specific UK assets would risk undermining that principle.
Her comments come amid rising tensions between the Treasury and the pensions industry over the Mansion House Accord, a voluntary agreement signed this week by 17 of the UK’s biggest workplace pension providers, including Aviva, Legal & General, Aegon, and Phoenix.
Under the accord, providers committed to allocating at least 10% of their default pension funds to private markets by 2030, with half of that—around £25 billion—going into UK-based assets such as infrastructure, start-ups, and other private investments.
While the Treasury estimates the pledge could generate £50 billion in new investment, it has emerged that a forthcoming review may recommend the government be given powers to mandate asset allocations if providers fail to meet their targets.
Blanc pushed back firmly on the proposal: “Mandation, we do not believe, is the right thing. The government needs to consider the unintended consequences. There is a whole chain of people—employee benefit consultants, employees, workers—who need to change behaviour, not just pension funds.”
“It’s like a sledgehammer to crack a nut. You have to be able to get everybody on board to do the right thing.”
The warning highlights growing unease in the pensions industry that government intervention could conflict with trustees’ fiduciary duties, potentially forcing them to make investment decisions that are not in the best interest of scheme members.
While Chancellor Rachel Reeves has said she does not believe mandation is necessary, she has notably refused to rule it out, telling reporters earlier this week: “I’m never going to say never, but I don’t think it’s necessary.”
That ambiguity has provoked a backlash from several key signatories to the Mansion House Accord, including Royal London, Aon, and Mercer, who argue that pension funds must retain autonomy to invest in a way that best serves savers.
Under the voluntary scheme, pension funds made it clear their commitments are conditional—subject to fiduciary duty and reliant on government and regulatory action to remove barriers to private market investment.
The debate is playing out as the government seeks ways to mobilise long-term domestic capital to drive economic growth and support national priorities. But industry leaders warn that undermining the independence of pension funds could backfire.
Blanc made her comments as Aviva reported strong Q1 trading, with general insurance premiums rising 9% year-on-year to £2.9 billion. The company is currently navigating a £3.7 billion takeover of Direct Line, and the Competition and Markets Authority confirmed it has launched a preliminary inquiry. Blanc said the inquiry was expected and would not delay the deal, which is set to complete mid-year.
As the Treasury prepares to publish its pensions investment review, Blanc’s comments are likely to be influential in shaping the debate—and may increase pressure on the government to steer clear of making investment in UK assets a legal requirement.
