UK government says deal will unlock £50 billion
Aviva, USS of Law and General and Signatories
Stop orders now, pension funds oppose
LONDON – UK’s major pension funds pledged on Tuesday to invest billions of pounds in UK businesses and infrastructure as the government relies on private investors to help it fund public projects and boost economic growth.
According to a government statement, 17 investment companies said they will invest up to 10% of their pension portfolio in infrastructure, property and private equity by 2030, with half of them going to be fitted by UK assets.
The government estimates that the deal is backed by investment firms including Aviva, Legal & General and M&G and will unlock additional investments of up to £50 billion.
Currently a voluntary luxury home agreement – built on an earlier agreement in 2023, but the government said it would monitor progress against the promise and “strengthen” it with further measures in the upcoming pension review.
The Financial Times and other media reported that the government is considering giving itself the power to force pension funds to invest in more UK projects, which is related to some executives who think it is not in the best interests of their clients.
“We believe that it is right to focus on unlocking more domestic investment, but we think the most sustainable solution is to create the right incentives, not empowerment,” a Phoenix spokesperson said.
The UK Treasury did not immediately comment on the matter.
UK Finance Minister Rachel Reeves said in a statement that the agreement would help billions of pounds into major infrastructure projects, clean energy and startups.
The new contract doubled the previous luxury home investment target, accounting for 5% of pension assets and expanded the scope of applicable assets.
Other signatories include some of the UK’s largest pension funds, university retirement plans, national employment savings trusts and people’s pensions.
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