TL;DR

The Pensions Regulator (TPR) said on 22 October that UK pension schemes could be more exposed to AI-related risk than their trustees think, Reuters reports. Because AI now runs through so many sectors, a portfolio that looks diversified may still have “hidden exposure”. TPR wants trustees to measure that exposure, stress-test portfolios against a severe market shock and push their advisers on what a downturn would do to returns.

What TPR is asking for

The regulator’s statement asks trustees to look at both direct holdings in AI companies and indirect exposure through other assets, across every asset class. They should then model how portfolios would hold up under severe stress.

Ben Gunnee, TPR’s executive director of market oversight, tied the request to trustees’ existing duties on investment governance and managing risk across different time horizons. Trustees should “assess their AI-related exposure, test portfolio resilience and challenge advisers now”, he said, so they know what a change in market conditions would mean for their holdings.

Why the warning lands now

TPR is not the first UK authority to raise the issue. Reuters points out that the Bank of England flagged in a July report that opaque funding arrangements in parts of the AI sector could make the scale of exposure hard to gauge, meaning a fall in richly priced AI shares could have a very broad impact. Earlier this week we also covered the Bank weighing an AI shock for its next system-wide stress test.

Reuters adds a figure from Stanford’s 2026 AI Index: companies worldwide put more than twice as much into AI-related activity in 2025 as the year before.

Looking forward

For trustees, the request comes on top of questions about their own use of the technology. We reported on Aon’s survey of trustees’ own AI use last week. TPR’s statement is about investment risk rather than tools, and Reuters does not report any deadline or new reporting requirement attached to it. In our view, the practical test is whether advisers can actually show trustees their look-through exposure to AI, since indirect holdings are, by TPR’s own account, where the risk is hardest to see.