Aegon, Cushon and M&G back £200m UK tech fund

If you pay into a workplace pension, a small part of your savings could soon help British science and technology firms grow. On 20 November 2025, the Treasury said Aegon UK, NatWest Cushon and M&G are in final approvals to seed a new British Growth Partnership Fund with an initial £200 million, aimed at high‑growth UK companies.

Here’s the simple idea: long‑term pension money can support promising young firms while still aiming to deliver fair returns for you over decades. The government frames this as part of a modern industrial strategy that keeps successful companies building and hiring in the UK, rather than seeking scale only overseas.

How your money moves, in plain English: you and your employer pay in each month → your pension provider runs a default fund → a small allocation may go to the British Growth Partnership Fund → that fund invests through specialist venture and growth investors → capital reaches UK start‑ups and scale‑ups → any gains, after fees, flow back into your pension pot over time.

Venture investing is different from buying big‑company shares. It is higher risk, returns can be lumpy, and money is tied up for years. That’s why schemes use only a slice of the overall portfolio and spread risk across many companies. Time horizon matters: your pension is a long‑run savings plan measured in decades, not months.

To support this shift, the British Business Bank plans a VentureLink initiative to help large investors understand the UK venture market and where it is already committing capital. The Bank also expects to raise at least £2 billion from pension funds over the next five years to back UK growth firms.

This sits within a wider pensions push. Seventeen of the UK’s largest workplace pension providers have pledged to put at least 5% of their default funds into so‑called productive assets, including UK infrastructure and private markets, which ministers say could bring more than £50 billion into the economy by 2030. The government also wants more, larger pension schemes able to invest at scale.

An investor‑led club called Sterling 20 launched in October 2025 to channel big pension and insurance money into infrastructure and fast‑growing businesses. Early examples cited by organisers include Legal & General’s pledge towards affordable homes and fresh allocations from Nest.

As with any big change, there’s debate. Supporters argue that a diversified slice in private markets can boost long‑term returns. Critics warn about illiquidity, valuations and the need to keep trustees’ duties to members front and centre. Recent reporting on the Mansion House programme captures both the ambition and the concerns.

Watch the fees. Most default workplace pension funds must keep charges at or below 0.75% a year, though this cap applies in specific ways and doesn’t automatically include all costs. Ask your provider how charges are applied in your default fund.

Performance fees are a special case. Some success‑based fees linked to private market funds can sit outside the 0.75% cap if they meet strict rules. Schemes must explain what they’re paying and why. It’s reasonable to ask how any performance fees are controlled.

What this could mean for your pot (illustrative only). If £30,000 grows for 30 years at 4% a year, it becomes about £97,000; at 5%, roughly £130,000 - a difference of around £30,000. Or, contributing £200 a month for 25 years could build about £100,000 at 4% versus £115,000 at 5%. Real‑world results vary and aren’t guaranteed.

What happens next? The £200 million is a first step, with more fundraising expected if trustees complete approvals and structures are finalised. The policy aim is to back more homegrown innovators while improving saver outcomes over time. We’ll keep watching the details - especially allocations, fees and how risks are managed on your behalf.