NatWest Group is reportedly exploring the sale of its controlling interest in Cushon, the fintech platform specializing in workplace pensions and savings solutions.
Just two years after investing £144 million to secure an 85% ownership stake, the Edinburgh-headquartered lender has engaged financial advisors to facilitate discussions with potential buyers.
This development signals a potential recalibration in NatWest’s approach to its non-core assets as it sharpens focus on core banking operations.
Cushon, founded in 2016, emerged as a disruptor in the retirement savings sector by leveraging technology to streamline pension administration for employers and employees.
The platform’s master trust—a flexible, multi-employer pension scheme—has amassed nearly £3 billion in assets under management and administration.
This growth underscores the rising demand for digital-first tools in an industry long dominated by traditional providers.
Last year alone, Cushon’s master trust generated £17.4 million in revenue, accounting for a staggering 97% of the company’s total income.
With a user base exceeding 650,000 members spread across roughly 21,000 employers, Cushon has positioned itself as a key player in the UK’s defined contribution (DC) pension market, where consolidation pressures are mounting due to regulatory thresholds mandating minimum asset levels for larger schemes.
NatWest’s initial foray into Cushon was part of a broader strategy to bolster its wealth management arm and diversify revenue streams beyond interest income.
The 2023 acquisition allowed the bank to integrate Cushon’s offerings into its commercial and institutional banking services, targeting mid-market clients through relationship managers.
A pilot program in 2022 paved the way for a soft launch in late 2023, followed by a full rollout in early 2024.
By embedding fintech innovation, NatWest aimed to enhance customer engagement in retirement planning, tapping into the £2 trillion UK pensions market.
Management retained a 15% stake, ensuring alignment with the bank’s vision for digital transformation.
However, the swift pivot toward divestment raises eyebrows about the integration’s success.
Under CEO Paul Thwaite, who assumed leadership in 2024, NatWest has embarked on a simplification initiative.
This includes trimming non-essential holdings to streamline operations, optimize the balance sheet, and mitigate risks in a volatile economic environment.
As first reported by Sky News, the sale aligns with these priorities, potentially freeing up capital for high-return investments like technology upgrades in core retail and commercial banking.
Industry observers note that while Cushon delivered steady growth, its fintech model may not mesh with NatWest’s traditional infrastructure, especially amid intensifying competition from pure-play providers like Smart Pension and Legal & General.
The pensions sector itself is undergoing shifts.
The UK government’s push for “super trusts”—consolidating smaller schemes to achieve economies of scale—has set a £25 billion asset threshold for multi-employer plans.
Data from recent analyses show that nine major DC providers surpassed this mark by the end of 2024, while others, including NatWest Cushon, lagged below £10 billion.
This regulatory nudge toward mergers and acquisitions has sparked interest from strategic acquirers, including asset managers and fellow banks eyeing scale.
Sources indicate multiple suitors have expressed preliminary interest in Cushon, drawn by its tech stack and established client roster.
A sale could value the firm at or above NatWest’s original outlay, reflecting its revenue trajectory and market positioning.
For employees and employers relying on Cushon, the uncertainty is tempered by the platform’s operational continuity.
The fintech has committed to upholding service standards during any transition, emphasizing its mission to make retirement savings accessible and engaging.
NatWest, meanwhile, has declined to comment on the speculation, adhering to its policy on unconfirmed deals.
What began as a step toward innovation now exemplifies the challenges of blending agile startups with more established players.
As NatWest navigates this exit, it underscores a maturing sector where adaptability and focus are paramount.
Whether Cushon finds a new home that accelerates its objectives remains to be seen, but the move could catalyze further M&A activity in the pensions arena, potentially benefiting savers through enhanced efficiency and choice.