Average DC default has 10% invested in top US tech firms

The pension provider released its findings after it analysed the allocations of three default funds provided by The People’s Pension (global investments – up to 85% shares), Nest (higher risk fund) and its own LifePath 2049 to 2051 fund.

The ‘magnificent seven’ includes Microsoft, Apple, Nvidia, Alphabet, Amazon, Tesla, and Meta.

The analysis found an average DC pot of £20,000 has approximately £2,033 invested in the US tech giants, including £437 in Microsoft, £420 in Apple and £353 in artificial intelligence (AI) giant Nvidia.

Additionally, an average of 1.7% (£286) is invested in Google’s parent company Alphabet, while £218, £168 and £151 is invested in Amazon, Tesla and Meta (formerly Facebook), respectively.

Noting the consistently strong performance of these US-based stocks – worth around $12.9trn (£801.25bn) at the end of April – the PensionBee said savers benefit from the companies’ “unusually consistent growth and resilience” and “proven track record of innovation” as well as diversification in different sectors of the economy.

However, it cited its own recent survey of 1,000 UK pension savers last month which found concerns about the practices of some of these companies, especially regarding generative AI.

It found the majority (between 60% and 70%) of savers said they would support resolutions aimed at addressing issues from AI such as the risk of misinformation and the human rights impacts of AI advertising practices.

PensionBee chief engagement officer Clare Reilly said: “At this year’s annual general meeting season, it’s crucial to recognise that pension savers’ interests are intricately tied to the activities of some of the largest companies in the world.

“Through our pension savings, we’re all investors in the biggest tech giants that dominate our everyday lives – from our smartphones to the convenient online marketplaces we use to shop.

“Whether or not we actively monitor our investments, our retirements, and even our ability to retire at all, currently hinge upon the fortunes of these companies. Part of the reason they feature so heavily in pension funds is their scale, but also their financial performance. Love them or loathe them, our lives are inexorably linked to their success.”