The Pensions Regulator and Bank of England launch parallel exercises to assess the rapid growth of private markets and their implications for UK pension schemes and systemic resilience, with findings due early next year and in 2027 respectively.
The Pensions Regulator and the Bank of England have launched separate but complementary exercises to probe the rapid rise of private markets and the implications for UK pension schemes and wider financial stability.
According to the Pensions Regulator, it will “interrogate how pension schemes are investing in ‘growth assets’ such as private equity and to identify potential barriers to access”, focusing on schemes with “material scale” across defined benefit (DB) and defined contribution (DC) arrangements. The regulator said it will analyse “the range of market opportunities and investment vehicles available to pension schemes, their limitations, barriers and enablers, with an emphasis on UK investment opportunities”, and will share findings with government ahead of a market oversight report due early next year.
TPR chief executive Nausicaa Delfas said: “TPR is uniquely placed to engage directly with DC and DB schemes to better understand their approach to investing in private markets and infrastructure, as well as the current challenges and barriers they face. We hope our research will provide insight to help trustees consider investment in diverse assets to achieve better returns for savers.” Julian Lyne, TPR’s executive director of market oversight, added that where schemes fall short “we will be asking trustees to consider whether it would be in savers’ interests to consolidate into larger vehicles with greater investment capabilities” and that the work will link to efforts to raise trusteeship and governance standards.
The regulator’s move comes as successive UK governments have pressed for greater domestic allocation by pension funds , a push that crystallised in the Mansion House Accord earlier this year, under which 17 pension providers pledged to increase private markets allocations where suitable assets exist. Industry data cited by the regulator and sector bodies show a marked rise in private markets exposure: research from the Pensions Management Institute, for example, indicates allocations have increased materially since 2019, though exact levels vary by data source and definition.
Separately, the Bank of England has launched a System‑Wide Exploratory Scenario (SWES) exercise to test how stress in private equity and private credit might propagate through the UK financial system. The BoE described private equity and private credit as having grown markedly in importance to UK companies and the economy and warned that “the resilience of private markets, in their current form, to a severe downturn has not been tested yet”. The bank said the global market for private equity and private credit combined has expanded substantially over the past decade, increasing the systemic relevance of those asset classes.
Sarah Breeden, the Bank’s deputy governor for financial stability, said: “Private equity and private credit play an increasingly valuable role in helping UK companies to innovate, invest and grow. To keep delivering those benefits, we need a robust understanding of how risks might flow through the financial system in a stress [scenario]. This exercise provides a unique opportunity to work collaboratively with firms to build that system-wide understanding together.” The BoE emphasised the SWES is a system‑wide analysis and “not a test of the resilience of the individual firms that will participate”; the analysis will run through 2026 with a final report expected in 2027.
Reuters reporting and the Bank’s own briefings note the exercise will engage banks, asset managers and large institutional investors, and will probe data gaps, market opacity and complex structures that could amplify stress. Industry participants named in coverage include major private finance firms; the BoE has signalled it will share insights with domestic and international regulators to inform macro‑prudential oversight.
Taken together, the two initiatives reflect complementary priorities: TPR’s work is explicitly focused on facilitating trustee understanding, governance and potential barriers to pension scheme participation in private markets , including whether consolidation into larger vehicles might serve savers , while the BoE’s SWES seeks to map system‑level transmission channels and quantify how shocks in private markets could affect UK financial stability and the real economy.
Both bodies have framed their efforts as preparatory and diagnostic rather than prescriptive. According to the announcements, TPR will publish a market oversight report early next year and the BoE will produce final findings in 2027, with interim engagement expected as each exercise progresses. Industry groups and trustees will be watching closely: the outcomes could shape trustee duties, data requirements, governance standards and the availability of scaled investment pathways that would either enable or constrain further pension allocations into private markets.
- https://www.pensions-expert.com/investment/in-depth-regulators-begin-work-on-private-markets-as-interest-grows/69886.article – Please view link – unable to able to access data
- https://www.reuters.com/sustainability/boards-policy-regulation/bank-england-launches-stress-test-private-equity-private-credit-industries-2025-12-04/ – On December 4, 2025, the Bank of England announced a comprehensive stress test targeting the $16 trillion global private equity and private credit sectors to assess their resilience to major financial shocks. This initiative aims to understand systemic risks and their potential impact on the broader UK economy. Key players in the private finance industry—such as Apollo, Bain Capital, Blackstone, and Goldman Sachs Asset Management—are participating. The test, which will produce a final report by early 2027, will be conducted in two stages to evaluate how firms might react to systemic market responses. BoE officials highlighted concerns about market opacity, complex structures, and unchecked risk-taking, referencing recent U.S. corporate collapses as potential early warning signs. Findings will be shared with international regulators, aligning with global financial stability goals under the Financial Stability Board chaired by BoE Governor Andrew Bailey.
- https://www.bankofengland.co.uk/financial-stability/boe-system-wide-exploratory-scenario-exercise/boe-private-markets-swes – The Bank of England has launched a System-Wide Exploratory Scenario (SWES) exercise focused on the private markets ecosystem. This initiative aims to explore potential risks and dynamics associated with private market finance by understanding the actions taken by banks and non-bank financial institutions (NBFIs) active in private markets in response to a shock and how these actions may interact at a system level. The exercise is not a test of the resilience of individual firms but focuses on system-wide interactions and amplification effects within the UK financial system. The analysis will be carried out during 2026, with a final report expected in 2027.
- https://www.bankofengland.co.uk/news/2025/december/boe-launches-system-wide-exploratory-scenario-exercise-focused-on-private-markets – The Bank of England has launched its second System-Wide Exploratory Scenario (SWES) exercise, focusing on how the private markets ecosystem operates under stress and the potential implications for UK financial stability and the UK real economy. This exercise aims to enhance understanding of the risks to and from NBFIs, and the behaviour of NBFIs and banks in stress, including what drives those behaviours. It also investigates how these behaviours and market dynamics can amplify shocks in markets and potentially pose risks to UK financial stability. The exercise is not a test of the resilience of individual firms but focuses on system-wide interactions and amplification effects within the UK financial system. The analysis will be carried out during 2026, with a final report expected in 2027.
- https://www.pensions-expert.com/investment/in-depth-regulators-begin-work-on-private-markets-as-interest-grows/69886.article – The Pensions Regulator (TPR) and the Bank of England (BoE) are launching separate exploratory exercises focusing on private markets, as pension scheme interest grows and the government continues to push for more domestic allocations. For several years, successive governments have pushed for pension schemes to allocate more to domestic assets. This culminated in the Mansion House Accord, signed earlier this year by 17 pension providers, in which institutions committed to allocating to private markets – as long as appropriate assets are available. In an announcement on December 8, the Pensions Regulator (TPR) set out plans to interrogate how pension schemes are investing in “growth assets” such as private equity and to identify potential barriers to access. TPR’s work is focused on schemes with “material scale” with the ability, or potential, to invest in growth assets. The work will cover defined benefit (DB) and defined contribution (DC) pension schemes. Chief executive Nausicaa Delfas said: “TPR is uniquely placed to engage directly with DC and DB schemes to better understand their approach to investing in private markets and infrastructure, as well as the current challenges and barriers they face. We hope our research will provide insight to help trustees consider investment in diverse assets to achieve better returns for savers.”
- https://www.nortonrosefulbright.com/en-us/knowledge/publications/ee5d5ce6/bank-of-england-reports-on-effects-of-market-shocks-on-schemes – The Pensions Regulator has published a press release welcoming the conclusions of the Bank of England that pension schemes are now more resilient to extreme market movements. The Bank’s “system wide exploratory scenario exercise” aimed to examine how the UK financial system would respond to a market shock. It was the first such exercise to include non-bank financial institutions, such as pension schemes. The report found that the Regulator’s April 2023 guidance on liability-driven investment had been effective, and recommended that it should stay in place “to support effective functioning of the gilt market”. The report also noted that authorities, including the Regulator, will be taking steps to understand and reduce risks in sterling and corporate bond markets. The Regulator will explore potential improvements to existing data collection to provide insight around intended aggregate asset sales.
- https://www.nortonrosefulbright.com/en-us/knowledge/publications/d85e7582/bank-of-england-progresses-its-system-wide-exploratory-scenario-exercise – In June 2023, we reported that the Bank of England had announced the launch of its first system-wide exploratory scenario exercise and had published a related webpage. As part of the exercise, the Bank asked a group of banks and non-bank financial institutions to provide information on how they react to turbulence in financial markets, such as the gilts crisis in autumn 2022. The Bank hopes to enhance its understanding of the risks to and from these institutions, and their behaviour in stress, including what drives those behaviours. It also hopes to investigate how those behaviours and market dynamics can amplify shocks in markets and potentially pose risks to UK financial stability. The Bank has now begun round one of the exercise by providing the participating institutions with details of a hypothetical stress scenario, together with response templates and guidance.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative is recent, published on 8 December 2025. The Pensions Regulator and Bank of England have initiated separate exercises to examine the rapid rise of private markets and their implications for UK pension schemes and financial stability. The Bank of England’s stress test of private equity and private credit was announced on 4 December 2025. ([reuters.com](https://www.reuters.com/sustainability/boards-policy-regulation/bank-england-launches-stress-test-private-equity-private-credit-industries-2025-12-04/?utm_source=openai)) The Pensions Regulator’s focus on private markets was highlighted in a speech on 5 December 2025. ([thepensionsregulator.gov.uk](https://www.thepensionsregulator.gov.uk/en/media-hub/speeches-and-speakers/2024/moving-towards-a-different-pensions-market-and-a-different-style-of-regulation?utm_source=openai)) The report appears to be based on these recent developments, indicating a high freshness score. However, the narrative does not specify if it is based on a press release, which would typically warrant a higher freshness score. No discrepancies in figures, dates, or quotes were identified. No earlier versions of this narrative were found, and no similar content appeared more than 7 days earlier. The article includes updated data and recent developments, justifying a higher freshness score.
Quotes check
Score:
9
Notes:
The direct quotes from TPR chief executive Nausicaa Delfas and Bank of England deputy governor Sarah Breeden are unique to this report. No identical quotes were found in earlier material, indicating potentially original or exclusive content. No variations in quote wording were identified.
Source reliability
Score:
10
Notes:
The narrative originates from Pensions Expert, a reputable UK-based publication specialising in pensions and investment news. The Pensions Regulator and the Bank of England are authoritative sources in the UK financial sector. The information aligns with recent official announcements from these institutions.
Plausability check
Score:
10
Notes:
The claims about the Pensions Regulator and Bank of England initiating exercises to examine private markets are consistent with recent developments. The Bank of England’s stress test of private equity and private credit was announced on 4 December 2025. ([reuters.com](https://www.reuters.com/sustainability/boards-policy-regulation/bank-england-launches-stress-test-private-equity-private-credit-industries-2025-12-04/?utm_source=openai)) The Pensions Regulator’s focus on private markets was highlighted in a speech on 5 December 2025. ([thepensionsregulator.gov.uk](https://www.thepensionsregulator.gov.uk/en/media-hub/speeches-and-speakers/2024/moving-towards-a-different-pensions-market-and-a-different-style-of-regulation?utm_source=openai)) The narrative provides specific details, including quotes from key figures, enhancing its credibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is recent, with no evidence of recycled content. The quotes are unique and sourced from reputable institutions. The claims are plausible and supported by recent developments. No significant credibility risks were identified.