In this article the 10 largest UK pension funds will be examined. But to give some nuance, we give a brief overview of the UK pension market related to the Swiss and Dutch pension market. The Dutch, UK and Swiss markets are the biggest pension markets in Europe.
Of all European countries the UK has the biggest pension market in terms of assets under management. The Organization for Economic Co-operation and Development (OECD) published research on the global pension industry called “the Assets in pension funds and all retirement savings vehicles at end-2021”. The research stated that the UK pension market has around $3.572 trillion in assets. According to PensionsEurope there are about 1300 pension funds in the UK. The Dutch pension fund market is considered the 2nd largest when compared to other countries in Europe. The Netherlands has a pension fund market valued at $ 2.042 trillion as of 2021. The Dutch pension fund market consists of around 150 pension funds according to the Exelerating database . The Swiss pension market is valued around $ 1.164 trillion as of 2021, making it the 3rd largest pension market in Europe. According to the Confédération Suisse, the Swiss pension market consists of approximately 1400 pension funds in 2021.
In the UK pension market, there are three types of asset owners: pension funds, DC Master Trusts and Investment Pooling Companies. The pension funds are asset owners specifically designed to manage retirement savings and they have the bulk of the assets under management. In the UK, they can be either defined benefit (DB) or defined contribution (DC) schemes. The DC Master Trusts are solely concentrated on DC schemes and the pooling companies are more specific investment vehicles. These three types of entities all play an important role in the institutional pension market.
Now we will focus on the top 10 biggest pension funds in the UK. We will examine their assets under management, pension membership and fund type. Furthermore, we will examine the asset allocation strategies of these pension funds, providing valuable insights into their investment portfolios.
In this article:
Top 10 largest pension funds
The top 10 largest pension funds in the UK are listed as follows:
1. The Universities Superannuation Scheme (USS) – £90,79 billion
The Universities Superannuation Scheme (USS) is the largest pension fund in the UK, with £90,79 billion in assets under management (AUM) as of March 2022.
It is a private pension scheme that serves employees in the higher education sector, including universities and research institutions. USS has approximately 500.000 members and invests in a diversified portfolio of assets, including equities, bonds, property, and fixed income.
The Universities Superannuation Scheme has an investment advisor, Mercer, fulfilling the role of external adviser (DB), while USS Investment Management serves as the principal investment adviser.
2. The NatWest Group Pension Fund – £53,78 billion
The NatWest Group Pension Fund is the second-largest pension fund in the UK, with £53,78 billion in assets under management (AUM) as of December 2021.
NatWest group Pension Fund consists of three sections: Main Fund section with £52.22 billion, AA section with £1.17 billion and NWM and RSBI section with £0.38 billion in asset under management. It is a private pension scheme that serves employees of NatWest Group, one of the UK’s largest banks.
The fund has over 200.000 members and invests in a diversified portfolio of assets, including equities, bonds, property, and derivates. The NatWest Group Pension Fund investment advisors are Bank of Scotland with the role of investment consultant and Aon with the role of consultant responsible investment.
3. The Electricity Supply Pension Scheme – £48,47 billion
The Electricity Supply Pension Scheme is the third-largest pension fund in the UK, with £48,47 billion in assets under management (AUM) as of March 2022.
The Electricity Supply Pension Scheme’s investment advisor is AON. It is a private pension scheme that serves employees in the UK’s electricity supply industry. The fund has over 200.000 members and invests in assets like equities, bonds, property, and private equity.
4. The BT Pension Scheme (BTPS) – £46,99 billion
The BT Pension Scheme (BTPS) is the fourth-largest pension fund in the UK, with £46,99 billion in assets under management AUM as of June 2022. The BT Pension Scheme’s investment advisor is XPS.
It is a private pension scheme that serves employees of BT Group, one of the UK’s largest telecommunications companies. BTPS has over approximately 270.000 members and invests in a portfolio of assets, including equities, bonds, property, and other growth assets.
5. The Pension Protection Fund (PPF) – £39,35 billion
The Pension Protection Fund (PPF) is the fifth-largest pension fund in the UK, with £39,35 billion in assets under management (AUM) as of March 2022.
It is a (public) government-backed scheme that provides compensation to members of defined benefit pension schemes when their employer becomes insolvent. The fund has 295.000 members and invests in a portfolio of assets, including public equity, government bonds, and annuities. The Pension Protection Fund’s investment advisor is Redington.
6. The British Railways Pension Scheme (RPS) – £38,46 billion
The Railways Pension Scheme (RPS) is the sixth-largest pension fund in the UK, with £38,46 billion in assets under management (AUM) as of December 2021.
Railways pension scheme consists of two sections: Railways Pension Scheme £36.70 billion and British Transport Police Force Superannuation Fund £1.75 billion in asset under management.
It is a private pension scheme that serves nearly 340.00 employees in the UK’s railway industry, including train operators and infrastructure providers. The Railways Pension Scheme’s investment advisor is Railpen. The fund invests in a portfolio of assets like private equity, government bond and directly held securities.
7. The HSBC Bank (UK) Pension Scheme – £37,53 billion
The HSBC Bank (UK) – HBUK Pension Scheme is the seventh-largest pension fund in the UK, with £37.53 billion in assets under management (AUM) as of December 2021.
HSBC Bank Pension Scheme consists of 3 sections: HBUK Section £33.94 billion, HGSU Section £2.90 billion and HBEU £0.67 billion in asset under management It is a private pension scheme that serves employees of HSBC Bank, one of the UK’s largest banks.
The fund has approximately 200.000 members and invests in a portfolio of assets, including liquid matching and credit. The HSBC Bank (UK) Pension Scheme – HBUK Section has four investment advisors with the role of investment consultant. Those four advisors are Willis Towers Watson, Redington, Lane Clark & Peacock, and HSBC.
8. The Local Government – Strathclyde Pension Scheme (LGPS) – £28,20 billion
The Local Government – Strathclyde Pension Scheme (LGPS) is the eighth-largest pension fund in the UK, with £28,20 billion in assets under management (AUM) as of March 2022.
The LGPS – Strathclyde Pension Fund’s investment advisor is Hymans Robertson. It is a public pension scheme that serves employees of local government organizations in Scotland. LGPS has over 266.000 members and invests in a portfolio of assets like equities and others.
9. The Barclays Bank UK Retirement Fund – £27,22 billion
The Barclays Bank UK Retirement Fund is the ninth-largest pension fund in the UK, with £27,22 billion in AUM as of September 2022. It is a private pension scheme that serves employees of Barclays Bank, one of the UK’s largest banks.
The fund has about 213.000 members and invests in a portfolio of bonds, properties, equities and derivates. The Barclays Bank UK Retirement Fund has multiple investment advisors, including Willis Towers Watson, Redington, Oak Pensions, Federated Hermes, Cambridge Associates, Blackstone, Barnett Waddingham, and Albourne.
10. The Local Government – Greater Manchester Pension Scheme (LGPS) – £26,84 billion
The Local Government – Greater Manchester Pension Scheme (LGPS) is the tenth-largest pension fund in the UK, with £26,84 billion in AUM as of March 2021. It is a public pension scheme that serves employees of local government organizations in Greater Manchester.
LGPs Greater Manchester has over 375.000 members and invests in a portfolio of assets, including equities, bonds, property, and alternatives. The LGPS – Greater Manchester Pension Fund’s investment advisor is Hymans Robertson.
