I become here a commentator, not an advisor or a to be CDC proprietor – just a jaw dropped commentator!
This is a truly extraordinary achievement by People’s Pension and they have done it in a year when they walked away from a deal with State Street and created an investment department of its own.
I think that People’s are underrated by the pensions industry and that in the past has included me, I hope that I can get to the bottom of what they are doing right and make sure I pick some of the gold dust up!
Here is Holly Roach of Professional Pensions with her and People’s Pension’s views
People’s Pension has reached £40bn in assets under management (AUM), having grown by £10bn in the last 14 months.
The master trust, which is managed by People’s Partnership, said it expects to exceed £50bn AUM within two years and £100bn within the next ten years, adding it is “poised” to become one of the top 100 asset owners in the world.
People’s Pension said its growth has been driven by strong investment returns, employer confidence, and a long-term commitment to delivering better value for its members.
People’s Pension trustee chair Mark Condron said:
“Just over a year ago, we passed £30bn assets under management, and to already be at £40bn is a huge achievement for People’s Pension.
“As our assets continue to grow, our commitment remains unchanged: to put members’ interests at the heart of everything we do and to use our scale responsibly to deliver long-term value for our members.”People’s Partnership chief investment officer Dan Mikulskis added:
“Reaching £40bn in assets under management marks yet another significant moment in the evolution of People’s Pension and reflects the confidence placed in us by members, employers, and advisers. It’s testament to the accomplishment of auto-enrolment in bringing millions more people into retirement saving, alongside the success of People’s Pension in providing a top-class home for members’ savings.
“This is another milestone in our journey to becoming a world class asset owner. Over the past year, we have expanded our in-house capabilities and forged new partnerships to support this evolution.
“Our continued growth brings with it greater responsibility, and as we look ahead, we will build on this progress by continuing to use our considerable scale most effectively to drive value for members.”People’s Partnership chief commercial officer David Meliveo said: “At a time when the government is reforming the market, and calling for larger, better-run schemes, achieving £40bn assets under management reaffirms that People’s Pension has the scale required to meet those expectations.
“Our focus remains firmly on what matters to our stakeholders, meaning we will continue to enhance our proposition and build on the strong returns we are delivering to our seven million members.
“As a pension with purpose, and with no shareholders to pay, we’re able to use our growing scale to benefit advisers, employers and most importantly our members.”
Last year, People’s Pension announced it would move £28bn into segregated markets with the appointment of Amundi and Invesco as asset managers. It also confirmed Robeco would manage its £3.6bn emerging markets portfolio.
The big unanswered question will be what People’s Pension can do to pay back all this money to those who default to become pensioners.
Yesterday, Nest gave us more detail on how they will look after those people who grow gloriously old (past 85). How will Nest meet that challenge? Will they use a flex and fix approach, are they considering a Retirement CDC or do they have more gold dust up their sleeve, that none of us quite understand (yet?).
People’s Pension is only 13 years years old, it came out of an insurer who had ruled the roost on Stakeholder Pensions and I am quite sure it will find a third success in growing to £100m by keeping people it looks after in a pension paid to the people by the People (in partnership).
Well done lads and lasses – happy retirement that lad front left!
While I do not wish to denigrate the performance of Peoples Pension in any way. the growth in the assets under management figure is likely to be flattered by recent equity performance of around 20% p.a. and which could have been achieved by passive index tracking. New contributions will also have added to the AUM.
ANNUAL PERFORMANCE (%) (USD)
Year MSCI World
2025 21.09
2024 18.67
2023 23.79
2022 -18.14
I expect we will see lots of other asset managers and Trustees trumpeting the growth in their assets under management.
Of course this has to be viewed at December 2025 in terms of a 1.59% dividend yield, a P/E of 24.04 and a P/BV of 3.91 on the MSCI World.
It is however worthwhile to consider the relative diversification risks of active versus passive management, where index performance tends to mirror the flow of funds into / out of the asset class rather than the relative performance of the individual elements of the index. In pension scheme terms, passive index tracking is equally cost effective for small as well as large schemes.
These figures are for quoted equities does the same not apply to private capital where the price/valuation is also determined by the flow of money into the asset class and is the current emphasis on private capital leading to over inflated valuations?
The diversification risk is much higher as the backdoor to a public listing is likely to lead to a more challenging valuation.
We have value for money assessments coming in and these will enable employers to see what they are buying. Whether they will buy and sell on VFM achieved is another matter.
People’s Pension appeal to employers who want pensions to be taken care of by a master trust and not have control of the funds – if they wanted control they would take a lot more control than they get from PP. People’s look after employers and staff very well and this is evidenced by that £40bn.
I do not disagree with you on the relative performance of Peoples Pension.
My record is rather stuck in the grove that with regards to pensions, employers are being encouraged to only consider the risks and to ignore the opportunities.
On a separate point I do wonder about the impact of CDC on existing mastertrusts.
I hope that many schemes will adopt Retirement CDC from 2029/9 – it is a good alternative to flex and fix even though it is not as flexible and there are workplace default decumulators that won’t be beaten by 60% by CDC.
What will be good is a thriving market for employers to choose from and this will only happen when people (like me) get off our arses and get their WOL CDC authorised.
If we sit back and wait for Retirement CDC some employers will be losing their staff a lot of pension (IMO)