You might’ve seen the Mansion House Accord in the news recently – but what does it actually mean for your pension?

In short, it’s a new agreement between the Government and some of the UK’s biggest pension providers. The aim? To pump billions more into British businesses and infrastructure.

Let’s take a closer look at what’s happening – and what it could mean for your retirement savings.

What is the Mansion House Accord?

The Mansion House Accord is a voluntary agreement between the Government and 17 major pension firms – including names like Aviva, People’s Pension and Royal London.

The idea is for these providers to invest 5% of your pension pot into UK-based investments that aren’t listed on the stock market (so-called “unlisted assets”) by 2030. That’s around £25 billion in total.

On top of that, up to 10% of pension funds could go into things like infrastructure, property and private equity – not just in the UK but globally. This could push a total of £50 billion into areas that pensions haven’t typically invested in before.

Importantly, this only affects defined contribution (DC) pensions – the type most of us have through our workplaces. If you’re part of a defined benefit (DB) or final salary scheme, this doesn’t apply to you.

So, will my pension be affected?

If you’ve got a workplace pension with one of the firms signed up to the accord, then yes – it could be.

This mainly affects your provider’s default fund – the investment option your money goes into if you’ve not chosen something else. These default funds are designed to be a ‘one-size-fits-most’ approach.

That means part of your pension could now be used to back UK-based projects – think infrastructure, start-ups, and property developments – especially if you’re in one of those default funds.

Is that a good thing?

It depends who you ask.

Supporters say this is a smart way to help grow the economy and offer pension savers access to new opportunities. The Government’s hoping to unlock investment in UK businesses that have previously struggled to attract big backing.

But there are concerns too. Some experts worry these kinds of investments could be riskier or offer lower returns than more traditional options. That’s why pension providers have largely avoided them until now – not out of disinterest, but because foreign investments often deliver better results.

There’s also talk of “financial repression” – where savers are nudged (or pushed) to keep their money at home, even if it’s not in their best interest. We’ve seen this before, particularly in the decades after World War II. And it didn’t always go well.

That said, nothing’s being forced (yet). But pressure from the Government is clearly building.

What should I do about it?

First off – don’t panic. This isn’t a dramatic overnight change. But it is a good time to give your pension a once-over.

Here’s what to think about:

• Check where your pension is invested – especially if you’re in your provider’s default fund.
• Look for balance – are you too heavily invested in one area? Is your portfolio too UK-focused?
• Get advice – before switching anything, speak to a qualified financial planner. They’ll help you figure out the best path for your goals.

Remember: the Government’s aim might be good for the country, but that doesn’t automatically mean it’s good for every individual saver.

Key takeaway: The Mansion House Accord could change where your pension gets invested – with more money flowing into UK businesses and projects. But the impact on your long-term returns isn’t clear yet. Now’s a good time to review your pension and, if in doubt, get expert advice.