Redefining the UK pension landscape and reshaping fund operations

The UK pensions market is entering one of its most significant periods of change in decades. With the Mansion House reforms and the forthcoming Pension Schemes Bill driving billions of pounds towards private markets, 2025 marks the start of a new era defined by consolidation, accountability and operational readiness. Expectations of what “good” looks like in pensions are being quietly but fundamentally reset.

Under the Mansion House Accord, the largest defined contribution (DC) workplace schemes have signalled an ambition to allocate at least 10 per cent of their main default funds to private markets by 2030, with at least 5 per cent of total assets going into UK private markets, subject to fiduciary duty. This could unlock up to £50 billion for assets such as UK private equity, infrastructure, property and private credit.

These investment commitments sit within a much broader reshaping of the system. The shift is both economic and structural. The government’s goal is to unlock pension capital to fuel national growth while improving retirement outcomes and fairness across the system. At the same time, reforms such as the Value for Money (VFM) framework and default consolidators for small DC pots are creating a clear policy direction: scale will be rewarded, inefficiency will not.

For fund managers and administrators, the impact will be felt in day-to-day operations rather than headline policy documents. Small pots are set to move into larger, value-tested schemes, which will accelerate consolidation across DC. Firms that can evidence value, reconcile data with confidence and operate at scale will progress. Those that can’t face rising scrutiny as reporting becomes more frequent and member expectations grow.

The direction of travel is reinforced by growing allocations to private assets. Recent ABI data shows that, among Mansion House Compact signatories, investment in unlisted equities within DC default funds has doubled in a year to £1.6 billion as schemes move towards a 5 per cent target by 2030. The push toward long-term, illiquid investment demands stronger valuation methods and more robust oversight. That places new weight on data quality, workflow design and auditability across the administration chain.

Building operational resilience for the consolidation era

As consolidation accelerates, operational resilience will define success. Administrators must be ready to support bulk transfers and deliver transparent performance insights that meet the expectations of regulators and members alike. That requires operating models that hold up under stress, not just in business-as-usual conditions.

That begins with data. Many firms continue to rely on legacy systems built for a world where funds were less plentiful and asset mixes simpler. In the new environment, fragmented data, manual reconciliations and static reporting will no longer suffice.  Administrators need systems that can unify accounting and workflow data within a single model: capable of scaling seamlessly as fund volumes and complexity increase.

Data standardisation is the first step. With consistent data models, administrators can link datasets across counterparties and reduce the operational friction that often accompanies transfers. The ability to validate and reconcile data efficiently will be critical – not only for meeting regulatory scrutiny but also for maintaining trust as members gain greater visibility over their pensions through dashboards and digital portals.

Automation of complex tasks is equally essential. Workflows that once relied on spreadsheets or batch processes must evolve into continuous, auditable operations. Automated task management and exception handling reduce processing times and ensure that data flows consistently between valuation, accounting and reporting systems. People are freed up to investigate exceptions and exercise judgement, rather than chase down missing files.

When executed well, automation and data integration together create resilience. Firms can absorb higher transaction volumes, manage greater complexity and produce the outcome-based reporting that the Value for Money framework demands.

From efficiency to evidencing value

Historically, the operational focus of fund administration has centred on efficiency: delivering the same outcomes faster and at lower cost. The reforms shift that emphasis. It is no longer enough to be efficient; firms must be able to prove value.

Under the Value for Money framework, cost is only one element of assessment. Administrators will need to show how their processes, systems, and controls contribute to better member outcomes. That means having clean, connected data that can stand up to independent scrutiny and explain performance drivers clearly across investment structures.

For example, as allocations to private markets grow, valuation frequency and accuracy become more important. Illiquid assets introduce complexity in fair value estimation and performance attribution. Administrators that can capture these processes within a unified system, rather than across multiple disconnected tools, will be able to demonstrate not only compliance but also the integrity of their data.

Reliable automation plays a key role here too. Automating complex calculations such as fee waterfalls reduce the risk of human error and ensures consistency across every output. This creates a foundation for transparent reporting to trustees and regulators, where value is demonstrated through accurate, auditable data rather than operational speed alone.

Unifying systems to meet scale and scrutiny

As the industry moves toward mega-funds and multi-employer schemes, scale will test the limits of legacy technology. Administrators will need systems capable of supporting complex fund structures, multiple share classes and diverse asset types without compromising performance or control. The winners will be those that can scale up complexity without scaling up operational risk.

A unified operational model is central to this. Consolidating core records into a single data environment integrates accounting with investor servicing, ensuring compliance is built in from the start. APIs and open architectures then connect administrators to counterparties in real time, removing friction across the chain. An open, well-documented API enables authorised systems to read and write against a single source of truth, which reduces double entry and improves timeliness across upstream and downstream processes.

Where APIs expose granular objects and event notifications, integrations with client-facing portals, treasury and data warehouses can run closer to real time, lowering operational latency and manual touchpoints. The result is a platform that fits into existing enterprise data flows without multiplying side files or bespoke bridges.

Adaptability is key too. As new reporting standards emerge and dashboards expand consumer visibility, systems must evolve without extensive redevelopment. Modern cloud-native platforms provide that flexibility, supporting bespoke reporting and visualisation with automation across workflows to manage consolidation at scale.

Ultimately, firms that bring data and workflows together, with reporting generated from the same source, will be best placed to demonstrate operational strength and meet new regulatory expectations. They will not only manage consolidation but thrive through it, turning operational readiness into a visible competitive advantage with clients and asset owners.

Preparing for an outcome-based future

The 2025 reforms represent more than policy change; they set a new standard for excellence in pensions administration. Operational design must now balance scale with greater transparency and stronger accountability. For administrators, this is a pivotal moment. The opportunity to participate in larger, value-tested schemes and private-market growth is significant, but it demands a foundation of clean, standardised data with resilient, automated systems that deliver both efficiency and evidence.

These reforms are reshaping not only pension operations but the wider private-markets ecosystem. As UK schemes allocate more capital to private assets, the domestic alternative investment landscape is expected to expand and mature. For the UK’s growing technology sector and fund managers alike, this creates a more competitive environment that rewards those with strong operational foundations. Ultimately, transparent data and scalable systems will matter not just for individual firms, but for the UK’s collective ability to thrive in a more capital-rich, outcome-driven market.