Smart Pension welcomes Chancellor's Mansion House goals

Smart Pension, one of the UK’s leading workplace pension providers, has expressed its support for the Chancellor’s newly announced target for UK master trusts to drive further investment into productive assets, each reaching scale - currently proposed at £25-£50 billion in assets - by 2030. The Chancellor’s commitment marks an accelerated step towards strengthening the UK pensions ecosystem, delivering better value for savers and accelerating economic growth driven by pensions providers.

Smart Pension has rapidly grown to serve 1.4 million savers, having scaled utilising parent company Smart’s proprietary technology platform, Keystone. 

Smart Pension’s assets have grown by over 5,900% since 2018, and it has consistently been the UK’s fastest growing master trust. It has led the industry with 10 master trust consolidations to date, placing it in a strong position to achieve the required scale. The organisation is also ahead of the curve in terms of the Chancellor’s investment aims, with 6% of assets already invested in private markets. 

Jamie Fiveash, CEO of Smart Pension commented on the Chancellor’s ambitions:

“We are very supportive of the Chancellor’s goal for defined contribution pension schemes to get to scale, to further unlock their power to invest in productive assets. We have led the industry in acquiring 10 other master trusts, building the processes and systems to be able to deliver the scale the Chancellor seeks, creating value for UK pension savers and driving additional opportunities in exactly the types of productive assets in discussion. Smart Pension is open for business, and welcomes that this may further assist the consolidation market so other schemes, such as contract based schemes, can move more easily where it’s in the best interests of the policyholders. 

“However, we are concerned that the consultation lacks detail on how effective competition can be ensured given the high barriers to entry - particularly as providers like Smart Pension have challenged the status quo through innovation for the benefit of savers in recent years. We have proven our ability to access private markets and have more progressive investment strategies than many other established players. Being the largest provider doesn’t necessarily mean providing the best solutions or outcomes for members. Scale is important, but we need to ensure new legislation continues to support the competition and innovation that drives the UK economy.

“In addition to this, the 2030 date seems challenging - delivering this level of consolidation within the proposed timeframe will require the entirety of pension infrastructure to step up. This includes consideration of schemes consolidating on legacy systems with poor data, as well as the increased flexibility required from Regulators, who will need to take a more pragmatic approach in order to facilitate consolidation at this pace and scale.”

Andrew Evans, Group CEO of Smart commented:

“We are very supportive of the Chancellor’s goal to accelerate consolidation of the DC pension market. Our Keystone technology platform has powered similar rapid transitions elsewhere in the world and we have strong financial backing, receiving capital from Aquiline, MUFG, Chrysalis Investments and household names such as J.P. Morgan, Fidelity and Barclays.

“We fully recognise the benefits that such scale can bring to the UK from an investment perspective, including encouraging pension schemes to invest in high growth businesses. Smart itself is exactly the kind of business that would have delivered the benefit for UK savers the Chancellor is trying to achieve, and exemplifies the opportunities such initiatives could unlock. In the UK, Smart Pension already has 6% allocation to private markets, and has plans to do more, including further investments in illiquid assets, meaning this announcement fits extremely well with our own mission to transform retirement saving.”