Three of Britain’s biggest pension providers - Aegon UK, NatWest Cushon and M&G - are in the final stages of approval to participate in a targeted £200m first close for the British Growth Partnership Fund, a new vehicle focused on high‑growth UK science and technology. HM Treasury confirmed the plan after a Downing Street meeting with Chancellor Rachel Reeves and Pensions Minister Torsten Bell on 20 November.

The British Business Bank, which will run the programme, is aiming to reach first close by the end of this financial year, allowing investments to begin in 2026 if the timetable holds. The Bank also intends to launch a Venture Link initiative to provide pension funds with clearer visibility over its venture commitments and deal pipeline, with stakeholder consultation to follow.

Today’s move sits inside a wider reset of UK pensions. On 13 May 2025 the Mansion House Accord saw 17 providers - covering around 90% of active DC savers - pledge to allocate 10% of default assets to private markets by 2030, with at least 5% in the UK; ministers say this could mobilise up to £50bn. Separately, the government plans to double the number of £25bn‑plus pension “megafunds” by 2030 to invest at scale.

Coordination has also stepped up through the Sterling 20 - a club of 20 large pension providers and insurers launched in October. Legal & General opened with a £2bn impact commitment to 2030, while other members assess mandates across housing, infrastructure and growth capital alongside the Office for Investment and the City of London Corporation.

For savers, exposure to unlisted equities in DC defaults remains small but rising. ABI data show Mansion House Compact signatories lifted allocations from 0.36% to about 0.6% over the past year. Across DC more broadly, around 4% is estimated to be in private equity and infrastructure combined. The diversification may enhance long‑run outcomes, but fees and liquidity need careful handling.

On strategy, the British Growth Partnership will invest directly - co‑investing alongside the Bank’s network of fund managers - with the three pension partners having completed due diligence and now finalising terms. The pipeline spans clean energy, advanced manufacturing and medical technology, and discussions are under way with London CIV on potential participation.

For founders, this is an incremental boost to late‑stage finance rather than a flood. The British Business Bank says it is the largest LP investor in UK venture and venture‑growth funds and the most active late‑stage investor in UK life sciences and deeptech, with total capacity lifted to £25.6bn this year to crowd in private capital.

What matters now for scheme trustees and finance teams is execution. Refresh the strategic asset allocation against Accord timelines; set a clear illiquidity budget and redemption policy; stress‑test cash flows under daily‑dealt default arrangements; and ensure any performance‑fee structures align with value‑for‑money duties and member communications.

Rules have shifted to make this possible. Since 6 April 2023, well‑designed performance‑based fees can be excluded from the 0.75% DC charge cap, provided governance safeguards and disclosures are in place. That gives trustees more room to use LTAFs or co‑investment structures without breaching caps, while still assessing value for members.

The debate on compulsion will continue. The Treasury has floated a potential ‘backstop’ if voluntary promises stall, even as industry prefers incentives. Near‑term markers are a £200m first close by 31 March 2026 and the Venture Link roll‑out. If both land on time, expect 2026 deal flow to pick up from this new pensions‑to‑venture channel.