How a pension charge tweak could boost investment into British start-ups

The Financial Conduct Authority has proposed changing workplace pension fee rules to make it easier for default funds to invest in private markets, including private equity and venture capital. Industry figures say this could direct more pension savings towards British start-ups and other businesses, while potentially giving savers access to more varied investments and growth opportunities.

The current 0.75 per cent charge cap has made some performance-linked fees difficult to accommodate. The FCA proposes excluding certain such fees from the cap, alongside safeguards for transparency, fair fee allocation and scrutiny of private asset valuations; it says higher charges must still be justified by value for savers. By December 2025, the 17 Mansion House signatories had put 3.3 per cent of their assets into UK private markets, with just £500 million in private equity. The consultation closes on 14 January 2027.