The steady increase in UK interest rates since the start of last year has resulted in improved funding ratios for the plans that comprise this $1.67tn pool of capital, allowing them to move money out of buyout and venture capital funds and into less risky assets, according to several pension system managers and consultants.

Traditional pensions have been a mainstay source of capital to sponsored funds for decades, but changed market conditions since last year have caused that flow to ebb. In addition, many of those pensions closed themselves to new members long ago and are now able to contemplate an orderly windup.

“Pension managers look at their [improved] financial position and say, ‘We don’t need as-high returns’,” said Lucy Barron, a partner in the investment consulting team at industry advisory firm Aon. These managers instead look to invest in assets that predictably match their expected liabilities rather than offer the potential to exceed them, such as corporate and government bonds and in some cases, private credit.

Julie Alexander, head of client investment solutions at RPMI Railpen, which provides investment management services and advice to 107 sub-funds investing the pensions of UK railway workers, said she has seen a number of these pools accelerate their move away from riskier assets. Railpen has the equivalent of around $42bn in assets.

The pension plans of supermarket chain Tesco and British Airways are among those to have done the same, according to several people familiar with the matter.

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