Your pension may own more British shares than you realise. After a decade of US dominance, is backing home still loyalty, or an expensive habit?
You log into your pension, survive another password reset, and find a reassuringly solid balance. Then a less reassuring question occurs: what does the money actually own?
A workplace default, an old UK shares fund and a stocks and shares ISA can add up to a large bet on Britain without anyone calling it one. After a decade in which US shares raced ahead, it is worth measuring that bet — not assuming the next decade will play out the same way.
Take the ten calendar years from 31 December 2015 to 31 December 2025. Based on FTSE Russell’s published annual total returns, the FTSE All-Share gained approximately 123% in sterling with dividends reinvested: about 8.4% a year.
Over the same dates, S&P Dow Jones Indices reports an S&P 500 total return of 14.82% a year in US dollars. Convert the compounded return using Bank of England year-end rates — £1 bought $1.4819 at the start and $1.3451 at the end — and the unhedged sterling return was approximately 339%, or 15.9% a year.
In the neat world of an index calculation, £10,000 became roughly £22,300 in the All-Share or £43,900 in the S&P 500. That £21,600 gap is worth noticing. It is not necessarily a bill your pension paid: you may not have held either index throughout, and contributions made along the way would have earned different returns.
These are index total returns, not what you would have pocketed. The UK figure is compounded from annual returns rounded to one decimal place. Both comparisons assume reinvestment and exclude the costs and tax effects of a real holding. Price-only headlines would miss dividends — a particularly poor way to judge a market where they matter.
Currency explains part of it. Over the measured decade sterling weakened against the dollar. A dollar-denominated investment was therefore worth more pounds at the end, even before the shares themselves came into it. That helped the unhedged US result; a stronger pound could have done the reverse. A fund priced in pounds is not necessarily sheltered from that exchange-rate risk.
The companies were different, too. The FTSE All-Share contains plenty of banks, energy, consumer staples and miners. US shares have offered much more exposure to large technology businesses whose earnings growth and share prices drove returns. Those are broad explanations, not a claim that every American company flourished or every British one stalled.
There is a catch to admiring the US result. A September 2026 snapshot of an S&P 500-tracking portfolio put information technology at 39.7% of its holdings and its ten largest positions at about 40.6%. You can own hundreds of US companies and still have a great deal riding on a handful of giants. The FTSE All-Share has concentrations of its own; its ten largest constituents made up 43.4% at 30 September 2026.
This is not diversified Britain versus diversified America. It is two markets concentrated in different ways. The US winners earned their place in the rear-view mirror. They have not signed up to keep winning.
Backing Britain is a choice; letting several accounts make that choice for you is an oversight.
Owning UK-listed shares does not mean your returns depend only on the UK economy. The All-Share includes businesses such as Shell, HSBC and AstraZeneca, whose operations stretch well beyond Britain. Their share prices can respond to global demand, commodity prices, overseas profits and currencies. Equally, an S&P 500 company can sell plenty to British customers.
That distinction does not mean home bias is imaginary. If your pension holds a UK equity fund, your ISA holds British shares and your job and house are also in Britain, your finances may be exposed to some of the same domestic shocks. Familiar names can feel safer. Familiarity is not diversification.
Nor does it follow that you should replace a UK tilt with a US one. Valuation matters: when investors pay a high price for expected growth, disappointment can hurt even if a business remains profitable. At September 2026, the S&P 500 tracker’s reported price-to-earnings ratio was 24.7 — a price that leaves expectations to meet. A less fashionable market may offer a different mix of income, price and risk, not a guaranteed bargain.
The past decade tells us which of these two indices did better over those dates. It cannot tell us what their future earnings, valuations or exchange rates will do. There are other share markets, and there are assets besides shares. Diversification avoids making one forecast carry your retirement; it does not promise that every holding will rise together.
Set aside about 20 minutes and find the latest holdings or fund factsheets for your defined contribution workplace pension, any older personal pensions and your stocks and shares ISA. You need no investing experience for a first pass: note each holding’s value, its share-versus-bond split and its geographical allocation. If the paperwork just says ‘global’ or ‘balanced’, look inside rather than taking the label as your answer.
For each account, multiply the holding’s value by its UK and US share percentages, then add the results. Suppose £100,000 of your pension is in a fund that is 40% UK shares and £50,000 in a fund that is 20% UK shares. That gives you £50,000 of UK share exposure, before your ISA or other holdings. Do the same for US shares. Check, too, whether a separate UK fund sits on top of UK holdings already present in a global fund.
MoneyHelper notes that workplace default funds commonly change their investment mix as your expected retirement date approaches. If you are in your fifties or early sixties, check that date and the fund’s current allocation: a low UK shares percentage might simply mean more bonds, not more overseas shares. A defined benefit pension works differently; you do not normally choose its underlying investments in this way.
An ISA is a tax wrapper, not a geographical allocation. Its overall allowance is £20,000 in the 2026–27 tax year; it does not decide which countries your shares represent. If what you find raises a consequential decision about retirement income, MoneyHelper or an FCA-regulated financial adviser is a better next stop than last decade’s league table.
The US market won this particular ten-year comparison by a wide margin in pounds. Dividends, a weaker pound and a different mix of companies all contributed to the result. Your useful next step is to measure the UK and US exposure you already have, then decide whether either country is carrying more of your retirement than you intended.
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