NatWest Cushon says it has a “clear path” to reaching the government’s scale target of managing at least £25 billion in assets by 2030 for pension providers, following the final report from the Pensions Investment Review, which calls for greater consolidation in the industry.
The report forms part of the government’s wider strategy to strengthen long-term investment in the UK economy. This includes reforms to the Local Government Pension Scheme (LGPS), which aim to pool assets into larger groups to improve governance and returns, with further details expected in the Pension Schemes Bill.
It cites data from Corporate Adviser’s Master Trust & GPP Report, which estimates that 9 private defined contribution (DC) pension providers currently hold over £25 billion in assets. The number of DC megafunds is projected to reach 10–15 by 2030 and 15–20 by 2035, based on past growth trends.
The report highlights that bigger DC pension schemes can lower costs and improve returns for savers. It supports new rules to let these schemes invest in a broader range of assets, like infrastructure and fast-growing companies, which is also the objective of the 17 pension providers in the Mansion House Accord.
NatWest Cushon CEO Ben Pollard says the business plans to grow through a mix of organic expansion and acquisitions. He highlights NatWest’s access to over 1.3 million UK businesses and strong partnerships with employee benefit consultants as key channels for growth.
Pollard points to the company’s 2021 acquisition of the Workers Pension Trust and the first-ever merger of two master trusts as examples of its commitment to industry consolidation.
He adds: “In addition to the first ever merger of two master trusts, we have over the past 2 years successfully migrated nearly 7,000 employers and 230,000 pension savers to our tech.”
Pollard says: “Around 1-in-4 businesses across the UK bank with NatWest — that’s over 1.3 million companies. As well as continuing to grow organically through this channel and others such as employee benefit consultants, we want to facilitate consolidation of the existing pensions industry. The government’s report provides a clear direction to the industry to get to the target scale. Our technology and customer-experience are market-leading, and we have a proven track record in acquisitions, mergers and migrations.”
NatWest Group MD, customer & growth, wealth businesses Kristina Spasic says: “The pensions market is looking at sustainable, structural, long-term growth and NatWest Cushon is well positioned to capture this growth. The recent Mansion House Accord, of which NatWest Cushon is a signatory, has demonstrated the crucial role the market plays in the country’s economic future.
“NatWest Cushon is a market-leader in both the experience it delivers to its customers, and in its ability to consolidate and grow. The growth strategy of the business is further amplified by access to the full scale and breadth of the NatWest Group, including the UK’s leading commercial bank.”
