One-in-Four UK Pension Schemes Consider Reducing US exposure

Tariff unpredictability, rather than tariffs themselves, is prompting UK defined benefit (DB) pension schemes to reassess their exposure to US assets, according to a new pulse survey by WTW.

While most schemes are maintaining their current allocations, around a quarter (24%) are now considering reducing exposure to US assets and the dollar.

This includes 25% of schemes specifically eyeing a cut in their US asset holdings, suggesting growing caution around geopolitical risk.

WTW’s findings indicate that schemes are becoming increasingly wary of ongoing trade policy uncertainty and its impact on global markets. The unpredictability surrounding tariffs and international relations is raising concerns about the stability of returns from US investments.

Investor anxiety also appears to be rising. Of the schemes able to respond, 34% reported an increase in member queries about market movements. According to WTW, this could signal that broader geopolitical turbulence is starting to affect member confidence and sentiment.

As the US heads towards a potentially volatile political and economic period, the findings suggest that pension trustees are paying closer attention to how these dynamics might influence long-term performance and considering whether to make strategic shifts in response.

Alasdair MacDonald, head of investment strategy UK, at WTW, said: “What’s new here is the scale and clarity of this emerging pivot. One in four schemes changing course is a meaningful shift in what has historically been a long-horizon, slow-to-move segment.

“This also does not appear to be a reaction to any one policy. It’s the recognition that policy uncertainty itself is now a market factor. We note recent positive negotiations between major trade blocs are a step in the right direction — but do little to remove this uncertainty.”