In a speech that offered nothing new, the pensions minister Emma Reynolds concentrated on the repeated government theme of the need for pension funds to invest more in UK assets, in her address at the Pensions and Lifetime Savings Association (PLSA) annual conference in Liverpool.
Like the chancellor Rachel Reeves, Reynolds enthused about the example of Canada as a pensions regime that invests “into a wider range of assets like infrastructure start-ups and private equity, which can boost returns and benefit the wider economy”.
“It is essential to overcome the barriers to increasing pension fund investment in UK productive assets to support our capital markets, which in turn will drive growth in our economy,” Reynolds said.
The scaling up of the pensions industry is the route by which the government sees this greater UK investment being achieved. “We want to see fewer, larger providers who have the scale and expertise to invest in a more diverse portfolio,” Reynolds said.
The government has undertaken a pensions review to take views from the industry about how pensions can play a bigger role in UK investment. The consultation period on this has now closed and Reynolds said she has received “over 200 responses”.
“We are putting together our proposals, taking into consideration the consultation responses and the stakeholder engagement we have been doing over the last few months, and we will publish an interim report in the autumn with the full recommendations from phase one to be published next year,” Reynolds added.
The fact that Reynolds offered nothing new left some asset owners disappointed. “This was a missed opportunity,” one asset owner told portfolio institutional, “we have a new government and a real opportunity to energise pensions and investments, but Reynolds clearly did not get the memo”.
This view was shared by another asset owner: “I was hoping for more than what we got: there was no real clarity on where the government plans to go.”
The lack of clarity on another issue was also a worry. “The fact that the pensions minister did not rule out mandation is a real concern,” said another asset owner.
Reynolds said “all the options” were currently on the table in addressing pension fund investment into UK assets.
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