Australian pension fund investment in the UK and Europe is expected to more than double over the next decade to around £323bn by 2035, according to a new report commissioned by IFM Investors and the Super Members Council.
The report, Bridging the Gap: The Opportunity for Australian Pension Capital in the UK and Europe, produced by Mandala Partners, highlights the growing potential for Australian funds to diversify internationally and for the UK and EU to attract long-term capital to help fund infrastructure and economic growth.
Australia holds the world’s fourth-largest pool of retirement savings, now worth around £2.1tn. Around £2bn flows into the system each week, and the sector is projected to reach £4.1tn by 2035.
Australian pension funds have increased their international allocations over the past decade, rising from 41 to 47 per cent of total portfolios. Around 60 per cent of new contributions are now invested mainly in the US, UK and Europe, with £40.6bn invested in the UK and £88.5bn in the EU as of mid-2025. And it’s expected to more than double to £99.2bn and £224.8bn respectively by 2035, which is an annual growth of around 10 to 11 per cent.
According to the report, public markets still dominate, but investment in private markets is growing. Australian capital is increasingly backing Europe’s energy transition, digital infrastructure, and transport, including renewables and storage, industrial decarbonisation, broadband in Germany, and major UK infrastructure projects.
The report notes that stronger policy alignment could accelerate this growth further. UK and EU governments could attract more pension capital by streamlining regulation, speeding up planning and permitting processes, expanding public-private partnerships and ensuring predictable revenue frameworks across sectors such as energy, water and transport.
IFM Investors head of global external relations David Whiteley says: “Australian pension investors have deep expertise in infrastructure investment, which makes them a sound and reliable solution when it comes to helping meet the infrastructure needs of UK and European societies.”
Super Members Council CEO Misha Schubert says: “Australia’s pool of retirement savings is growing at such speed and scale that the world’s biggest economies are competing for our pension capital, which means more money in retirement for Australians and finance that supports critical infrastructure projects and jobs in the UK and Europe,”
Mandala senior adviser Nick Williams says: “Our research shows Australian pension investment in the UK and Europe is set to more than double to over A$660 billion (£323B; €370B) by 2035, but unlocking the full potential of this capital will require policy settings that streamline regulation, accelerate planning and ensure predictable revenue frameworks in key sectors.”
