Is the UK selling its financial future?

Large global firms are stepping into UK financial services with increasing confidence, especially across life insurance, pensions, and asset-backed platforms. Brookfield’s acquisition of Just Group for £2.4bn, and the Apollo-backed Athora deal to buy PIC for £5.7bn, are just two examples of this trend.

I’m not suggesting this is some great threat. Firms like Brookfield and Apollo bring balance sheets most UK businesses can only dream of. Pension schemes benefit from extra capacity. Shareholders do very well out of it. Everyone can point to immediate upsides. So it’s not bad by any means. What I’m more interested in is the domino effect it could create. 

Financial services is one of the few global industries Britain still leads. We don’t make cars at scale. We don’t dominate heavy industry. What we do have is a world-class financial ecosystem. 

If more UK insurers end up being absorbed by large international players, what does that mean for the shape of our financial services industry in ten or twenty years’ time? Where does long-term control sit when assets, profits and strategic decisions start moving offshore? 

Why the capital is coming from abroad

Britain holds one of the largest pools of pension capital in the world. Around £2-3 trillion sits inside the system. Yet only 4% of that finds its way into UK assets. 25 years ago, it was 50%. There is simply no UK money floating around. Domestic institutions have retreated from backing their own economy, leaving a void that foreign capital now fills.

This shortfall of home-grown capital leaves UK financial firms more reliant of foreign investors. When British life insurers need fresh equity, or when pension liabilities need a buyer, often it’s overseas funds that step in with the necessary cash.

Many UK firms are thriving precisely because they are being bought. Take Just Group: before the bid, it was valued at ~0.6x its capital, well below peers. Brookfield’s offer, which delivered a 75% premium to shareholders, immediately lifted that valuation to 1.1x its own funds. The market suddenly decided that it was a good company after all – a clear illustration of how the UK’s chronic underinvestment in itself can leave strong businesses undervalued, until overseas capital comes to the rescue. 

Reinsurance, regulation and risk

This debate connects to something Vicky White from the PRA highlighted in her 2025 speech.

Her central argument was that the UK should retain more reinsurance activity domestically, rather than seeing it flow overseas. What makes me uneasy is the PRA’s direction of travel appears to be tougher rules for overseas reinsurers, effectively making it harder for them to operate in the UK. 

The intention is to protect domestic activity by over-regulating and reducing risks. But finance thrives on risk-taking. That is how returns are generated. If regulation becomes so restrictive that firms feel they cannot operate effectively, they will find somewhere more accommodating, and it could leave the UK with fewer options, less liquidity, and reduced competitiveness.

So is this dangerous or will it unlock growth?

I’m not interested in turning this into an anti-corporate argument. Firms like Brookfield and Apollo are not arriving empty-handed. They bring scale, they strengthen balance sheets, they widen investment capability.

From the perspective of pension trustees, deeper pools of capital make it easier to secure their schemes with an insurer. From the perspective of shareholders, acquisitions unlock value that public markets had failed to recognise. It means more security for the policyholder, too. 

The more important question, in my view, is how we think about the long term. Financial services is built on commitments that stretch across decades. Pensions and life insurance are generational promises, not quarterly targets, yet too often our domestic system behaves as though value must be proven immediately. 

If we want financial services to remain a defining national strength, we need to rebuild a culture of long-term thinking within the UK itself. We should be supporting domestic capital formation, encouraging patient investment, and creating an environment where firms can compound value over time rather than constantly proving themselves to short-term markets. 

There is also the issue of national interest. When institutional UK money such as pension funds and life insurance is increasingly managed, insured, or backed by overseas firms, the boundaries blur. The industry remains physically here, while the ownership, governance, and strategic gravity may sit elsewhere. That’s not inherently problematic, but it does affect how capital is deployed, where risk is taken, and which priorities ultimately dominate. 

An open question or the industry

I don’t have any neat answers here. What I do have is a growing sense that we are at an inflection point.

International capital has brought liquidity, scale and confidence to a sector that needed momentum. It has also exposed how thin domestic commitment to domestic growth has become. Global firms did not invent these conditions, they responded to them. This is the landscape that now defines institutional financial services in Britain. It offers opportunity, challenge and a set of strategic questions that deserve discussion.

I keep returning to the same reflection. When a British insurer prospers only after a transatlantic bidder arrives, something structural deserves scrutiny. The industry may decide that this represents healthy globalisation. It may decide that it signals a slow erosion of financial sovereignty. Both interpretations carry weight.

This debate will shape the next chapter of institutional financial services in the UK. What feels certain is that FS remains one of Britain’s defining assets. How we choose to steward ownership, capital formation and regulatory posture across the next decade will shape whether that asset compounds locally or accrues elsewhere.

For now, I will continue asking the question that first lodged in my mind. Are we nurturing our financial institutions for the long term, or simply curating opportunities for someone else to buy?