UK Pensions Regulator Urges Trustees to Stress-Test Portfolios for AI Concentration Risk

The UK’s Pensions Regulator (TPR) has urged pension trustees to assess their exposure to artificial intelligence-related risks and stress-test portfolios against severe market downturns, warning that investments may carry greater AI exposure than trustees realise.

In a statement, the regulator said AI’s growing integration across sectors could create hidden concentrations of risk, even in portfolios that appear diversified. It advised trustees to assess direct and indirect AI exposure across asset classes and challenge investment advisers on portfolio resilience under different market conditions.

Ben Gunnee, Executive Director of Market Oversight at TPR, said pension schemes must maintain robust investment governance and manage risks over the short, medium and long term.

The Bank of England also flagged concerns in a July report, noting that limited transparency in some AI funding arrangements could make it difficult to assess the extent of the risks. A sell-off in highly valued AI stocks could therefore have wider market implications.

Global corporate investment in AI-related activity more than doubled in 2025, according to the Stanford Institute for Human-Centered Artificial Intelligence’s 2026 AI Index Report.