Britain’s biggest pension funds have pledged to boost investment in businesses and infrastructure projects in the UK.
Ministers said the Mansion House Accord, which will today be signed by 17 of the UK’s largest retirement pot providers, could unlock £50billion for the economy.
But industry leaders warned that the Government must develop a pipeline of investment opportunities for the new targets to be met.
Fears are mounting that Chancellor Rachel Reeves will mandate pension allocations if investment in the UK continues to lag.
Aviva, Legal & General and the Universities Superannuation Scheme are among the providers that have promised to invest 10 per cent of workplace pensions in unlisted assets by 2030. Of that, 5 per cent will be allocated to the UK.
It means pension providers will aim to invest more in assets that are not listed on major stock markets.
Investment boost: Ministers said the Mansion House Accord, which will today be signed by 17 of the UK’s largest retirement pot providers, could unlock £50bn for the economy
Retirement savings could be used to fund start-ups, infrastructure schemes and housebuilding.
Amanda Blanc, chief executive of Aviva, said the accord was a ‘major opportunity for the
pension and investment industry to support UK growth while delivering improved outcomes for pension savers’.
The agreement ‘will unlock investment in UK private markets while helping deliver better long-term returns and retirements for pension savers,’ Phoenix Group boss Andy Briggs said.
‘The new commitments have the potential to strengthen the economy by fuelling the growth of British businesses,’ he added.
Michael Moore, chief executive of the British Private Equity and Venture Capital Association, said: ‘This agreement could be a huge step forward for the UK economy if the signatories follow through on their commitments.’
Aegon UK, Aon, LifeSight, M&G, Mercer, NatWest Cushon, Nest, Now: pensions, Phoenix Group, Royal London, Smart Pension, the People’s Pension, SEI and TPT Retirement Solutions are among the other firms to back the accord.
Yvonne Braun, director of policy at industry body the ABI, said: ‘It is now critical that the Government supports the industry’s ambition by facilitating a pipeline of suitable investment opportunities, tackling barriers to investments and delivering wider pension reforms effectively.’
The Chancellor said: ‘I back this bold step by some of our biggest pension funds, which will unlock billions for major infrastructure, clean energy and exciting start-ups – delivering growth, boosting pension pots and giving working people greater security in retirement.’
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