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Don’t force pension funds to buy British, Aviva chief warns ministers

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City Editor

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British pension funds should not be forced to invest in UK assets, the boss of one of London’s biggest insurance firms has said, in a rebuke of the government’s pension reforms plans.

The Treasury this week helped seal a voluntary, non-binding agreement by pension funds, dubbed the Mansion House Accord, will see increased investment into major infrastructure projects as well as greater venture capital investment into fast-growing startups, in a move which Downing Street hopes will create jobs and drive economic growth.

Dame Amanda Blanc said she did not believe a government order was “the right thing” or “a necessary strategy because we do think that pension providers are already willing to invest in the UK and are already, as we have proven, doing so”.

Blanc said the government would need to consider the “unintended consequences” and that there was a “chain of people who need to change behaviour”, not just pension funds. These included employee benefit consultants, employees and workers.

“It’s like a sledgehammer to crack a nut. You have to be able to get everybody onboard to do the right thing.”

Aviva’s insurance arm gets bigger

In the first quarter of 2025, Aviva’s general insurance premiums increased by nine per cent to £2.9bn, while retirement sales increased four per cent to £1.8bn.

Protection and health sales expanded rapidly, jumping 19 per cent to £126m as consumers turned to private health insurance amid lengthy NHS waiting lists.

Meanwhile, investors withdrew £906m from the firm’s investment arm throughout the quarter, though this was half of the £1.8bn pulled during the first quarter of 2024.

Aviva credited the outflows to withdrawals from clients pulling out of internal assets (which lost £470m) and strategic outflows from clients “previously part of the group”.

Despite the withdrawals, assets under management in the investment arm grew by one per cent to £240bn thanks to the impact of market movements and strong flows into the firm’s liquidity strategies.