When we pay money into a pension fund, we think, above all, about the moment when we will need it: supplement the public allowance, cover the expenses, preserve a bit of peace of mind. In the meantime, however, that capital is invested. It can finance a state, a company, a building or an infrastructure. The destination matters, because it helps determine the returns and risks of our future retirement.
So where does the money we put aside for retirement go? A first response comes from the United Kingdom: the monitoring of Mansion House Accordreleased by the Association of British Insurers and Pensions UK, photographs 11.1 billion pounds invested in the British private markets by the signatories, in the pension lines examined.
What the UK is doing
The Mansion House Accord is a voluntary commitment by 17 welfare providers. The 2030 objective is to allocate 10% of the assets of the default defined contribution lines to private markets, including 5% in the United Kingdom, in compliance with the obligations towards members.
In these schemes, future performance depends on the accumulated capital and management results. The monitoring considers the savings growth phase, before the progressive reduction of risk that can accompany the approach to retirement.
The idea is to link resources available for many years to investments that take time to produce results, but the report poses one condition: the priority remains the benefit for the saver, not the financing of the economy at any price.
Where did the investments go?
The most significant detail concerns the weight of the real estate. Among the major UK destinations surveyed, buildings absorb much more capital than stakes in unlisted companies.
| Top destinations in the UK | Invested assets |
|---|---|
| Real estate, including social and affordable housing | £8 billion |
| Infrastructure | 1.3 billion |
| Private debt and credit | 900 million |
| Private equity | 500 million |
Source: Association of British Insurers and Pensions UK, data at the end of 2025. The items reported do not exhaust the total of 11.1 billion.
Furthermore, commitments for a further 3 billion pounds have been signed for the national private markets, still to be invested at the date of the survey. Committed capital and capital already employed are not the same thing.
Photography helps overcome a misunderstanding: investing in the real economy does not necessarily mean financing new technology companies. It can mean buying properties, supporting infrastructure or granting financing through private debt, debt not traded on public markets.
Because this news also concerns Italy
Italian pension funds also invest in the national economy. According to the considerations of the Covip president on the 2025 Report, these investments amount to 43.9 billion euros, 19.3% of investments in the perimeter considered.
The figure includes government bonds, instruments issued by resident entities and real estate. Investments in securities of Italian companies are, however, 5.8 billion, divided between 3.4 billion in bonds and 2.4 billion in shares. Added to this are 2.3 billion in domestic investments through shares of undertakings for collective investment in transferable securities.
We cannot directly compare the Italian 43.9 billion with the British 11.1 billion: tools, operators and perimeters change. The Italian data includes public debt; the British one specifically concerns the private markets of certain pension lines.
The useful comparison is another: how much social security savings do companies achieve and under what conditions? Buying a government bond and financing a company are both domestic investments, but they have different characteristics.
Can retirement money support growth?
They can do it, but it is not enough for a project to be useful to the country for it to also represent a good social security investment.
An infrastructure can generate revenue for decades; a business can grow and create value. However, delays, higher-than-expected costs or insufficient results can compromise performance. Furthermore, in private markets, selling an investment quickly can be more difficult and the valuation less immediate than a listed security.
Portfolio diversification therefore matters: distributing resources across activities, sectors and countries reduces dependence on a single source of risk. Investing close to home is not, in itself, a guarantee of safety.
What anyone who pays into a fund should know
First of all, it is necessary to distinguish supplementary pensions from public pensions. In pension funds, contributions are invested to build the member’s capital. In the public pay-as-you-go system, current contributions finance pensioners’ benefits.
To understand your position, the chosen sector, costs, risks and time horizon are central. The presence of national investments, alone, does not say how much the fund will yield.
The British lesson is precisely about this balance: retirement savings can help build homes, infrastructure and businesses, but it must first build a pension. For those who set aside part of their salary, the decisive question remains what benefit they obtain in exchange for the risk taken.
