Financial Times. Chancellor Jeremy Hunt has been urged by the UK pensions industry not to force retirement schemes to invest in riskier and complex assets including fastgrowing young British companies, and infrastructure.
Hunt has said he would not be “instinctively comfortable” with ordering pension binds where to invest some of their money, but has not ruled out such a move as he looks for ways to boost Britain’s sluggish economy.
The chancellor’s preference would be for Britain’s highly fragmented pensions market — with roughly 28,000 defined contribution schemes — to be consolidated, along Canadian or Australian lines, so as to boost investment in UK companies.
But Treasury insiders said Hunt has not yet figured out exactly how this consolidation might be achieved and the degree to which some form of government intervention is needed.
Hunt promised last month to use his Autumn Statement to “unlock productive investment from defined-contribution pension funds and other sources” — so as to create a more diverse financing system to help high-growth companies.
He is expected to give more details of his thinking in his annual Mansion House speech to City of London grandees in July, as he tries to mobilise more capital to increase Britain’s economic growth rate.