Sarah Brown, Principal and Senior Actuary, Gallagher: “The UK’s network of pensions schemes – many of which are now in a comfortable surplus – has emerged as an unsung success story for the cohort of workers who had access to such a scheme. It makes sense that the government would be keen to leverage the considerable investment power that has accumulated in those schemes and use it to fund its wider economic policies. If successful, a UK pensions megafund, composed from both DC schemes and Local Government Pension scheme pools, could amount to at least £25bn in assets by 2030. However, a mandate for schemes to invest in UK assets may alienate trustees. Only 30% of public sector DB schemes are invested in the UK, and that figure is even lower for DC schemes – around 20% are invested in the UK compared to 50% in 2014. However, trustees must allow for the membership’s best interests, and some trustees may not be willing to funnel assets into a UK-based investment to appease the Chancellor. Retirement security is a pressing concern for millions of people, and members will need reassurance that trustees are considering every investment option - regardless of geographical location.”
Royal London’s director of policy Jamie Jenkins says: “The Chancellor’s speech marks a welcome shift in the Government’s rhetoric from the stick of mandating investment in UK markets to more of a carrot. The initiatives announced will help people engage with the long-term benefits of investing their savings, while contributing to growth in the economy.”
Helen Forrest Hall, PMI’s Chief Strategy Officer: “Retirement adequacy cannot be solved in isolation. We must break down product silos and build a lifetime savings framework that reflects how people actually live—balancing pensions, ISAs, housing and emergency savings.”
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