Vanguard has decided to reduce its investment in UK stocks as part of its LifeStrategy funds, turning down the Chancellor’s initiative to boost investments within the UK. This move aims to align with what Vanguard describes as the ‘more global focus’ of UK investors.

In a significant shift, the investment giant plans to divest approximately £1.85 billion from UK equities within its LifeStrategy range. This decision reflects a broader strategy to cater to investors looking beyond domestic markets.

Alongside this strategic reallocation, Vanguard will also lower the fees for its LifeStrategy funds from 0.22% to 0.20%, effective January 27.

This withdrawal of UK stock investments by a prominent platform, which serves around four million investors, poses a challenge to Rachel Reeves’s recent efforts to enhance the attractiveness of investing in the UK.

Reeves recently unveiled plans to ease regulatory burdens for companies considering listing or raising capital in London, declaring it a ‘new golden age’ for the City’s financial landscape.

Meanwhile, the FTSE 100 has reached unprecedented levels in 2026, even as the US financial market faces uncertainties following President Donald Trump’s controversial remarks about the Federal Reserve and his unexpected proposition to acquire Greenland.

Vanguard is one of the UK’s most popular investment providers, attracting customers with its relatively low fees and simple no-frills range of tracker funds

But Vanguard says it is reducing exposure to UK equities in its LifeStrategy range from 25 per cent to 20 per cent, which it will carry out in stages between March and June.

It is making even more drastic cuts in exposure to UK debt, from 35 per cent to 20 per cent, in the LifeStrategy funds which hold government and corporate bonds and other similar fixed income investments.

Meanwhile, it will launch five new LifeStrategy Global funds, designed for investors who want to be fully invested across global markets, with no extra weight given to the UK. These will also have a 0.20 per cent fee – see below.

New fees on Vanguard LifeStrategy mutual fund range from 27 January 2026

Vanguard says: ‘Over time, as UK investors have grown more confident investing internationally, LifeStrategy has evolved to have a more global focus.

‘Today, more investors want a mix that spreads their money across the world, while keeping a meaningful investment in the UK. To reflect this, the LifeStrategy funds’ exposure to global markets is set to increase.’

It went on: ‘We continue to have strong conviction in the UK as an essential part of a diversified portfolio. 

‘On the behalf of our clients, we invest £140billion in UK listed equities and manage around £220billion in UK domiciled funds. That speaks both to our confidence in the UK and to the importance of offering investors the flexibility to invest globally.’

Vanguard had £10.2billion in its LifeStrategy 100% fund at the end of 2025, so a 25 per cent portion in UK stocks would have been worth £2.55billion at that point. Cutting that percentage to 20 per cent would represent a £510million cut to £2.04billion

The Vanguard LifeStrategy 80% fund held £15.1billion in total, so the four fifths of the fund held in stocks would have been worth £12.08billion.

At 25 per cent, the UK exposure would have been worth £3.02billion at the end of last year. Reducing it to 20 per cent would mean a £2.42billion exposure, down £604million from before.

The LifeStrategy 60% fund was worth £16.9billon, with £10.14billion in equities. The plan to cut UK exposure would have seen this reduced by £507million to £2.03billion as things stood at the end of last year.

The LifeStrategy 40% and 20% funds are smaller, holding £5.3billion and £991million respectively at the end of 2025.

Their stock exposure is smaller, but their domestic holdings will also drop as Vanguard is planning a significant cut from 35 per cent to 20 per cent in its UK fixed income assets – mostly government and corporate bonds – in its funds.

This is Money contacted Vanguard about the figures above, and asked how it thought the Chancellor would react to its move away from the UK market when she is trying to persuade investors in the opposite direction.

Vanguard is one of the UK’s most popular investment providers, attracting customers with its relatively low fees and simple no-frills range of tracker funds.

It charges a £4 monthly admin fee to hold investments worth up to £32,000 and 0.15 per cent above that up to a maximum of £375 a year. It introduced the monthly fee for the first time at the start of 2025.

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