Bridging the gap: the opportunity for Australian pension capital in the UK and Europe

With A$4.3 trillion (£2.1T; €2.4T) in assets under management as of June 2025, Australian pension funds form the fourth-largest pool of retirement savings globally, behind only the US, Canada and the UK. Assets have grown strongly over the past two decades, supported by mandatory contributions, preservation rules, and competitive fund structures. Total inflows of around A$4 billion (£2.0B; €2.2B) each week will continue to drive this rapid system growth. By 2035, the Australian pension system is estimated to reach A$8.3 trillion (£4.1T; €4.6T) and will likely be the largest outside of the US.

As the system has matured, Australian pension funds have steadily expanded their international allocations to help
diversify risk and access the best investment opportunities globally. In the past decade, overseas investment has increased to nearly half of pension funds’ portfolios. This is set to increase further, with nearly 60 cents of every new
Australian dollar contributed to Australian pension funds invested globally.

This report reveals that the UK and European Union (EU) together represent the second-largest international destination for Australian pension capital after the US.