UK investments in focus at select committee session
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MPs will gather evidence from the pensions industry and finance thinktanks about pension funds and UK investments next week, in the context of the upcoming pension schemes bill.
The introduction of the Pensions Scheme Bill, expected before parliament’s summer recess, is likely to include measures to get pension funds investing more in the UK, as the government views this as a means to generate growth. T
he Work and Pensions Committee has announced a non-inquiry session into UK investment to be held on 14 May.
“In recent months, the government has threatened to mandate in law levels of investment by pension schemes in the UK if they do not do so voluntarily,” the committee noted.
The session was announced shortly after the government’s response to a defined benefit inquiry was published last week.
MPs will first hear from Finance Innovation Lab, independent pensions researcher Jackie Wells and thinktank New Financial. The second panel consists of the Association of Professional Pension Trustees, the Pensions Policy Institute, the Association of British Insurers and the Pensions and Lifetime Savings Association.
The non-inquiry session comes as the government is reportedly considering a ‘Mansion House II’ that would increase the level of commitment to UK unlisted equities to 10% by 2030. The original Mansion House Compact members pledged to invest 5%, but a one-year progress update by the Association of British Insurers in 2024 showed just £793m of unlisted equities was held in default funds, equating to 0.36% of a combined £219bn. The exception was master trust Nest, which started investing in private equity in 2022 with Schroders, aiming for a £1.5bn exposure by early 2025 and holding around 2% in each of its target date funds.
Since the update, both Aegon UK and Scottish Widows have highlighted planned investments in private markets.
Earlier this year, pensions minister Torsten Bell told the assembled pensions industry that Britain cannot carry on being the lowest investor in the G7, and that “change is going to come”.
Is the government giving enough consideration to carrots for UK investment while it keeps brandishing a stick?
