Pension Schemes: Incentivising UK Investment

Treasury – in the House of Commons at on 19 December 2023.

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Photo of Flick Drummond Flick Drummond Conservative, Meon Valley

What steps his Department is taking to incentivise pension schemes to invest in the UK.

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

At the autumn statement, we set out a series of measures to improve pension saver returns, increase opportunities for investment and boost the UK’s capital markets and high-growth companies.

Photo of Flick Drummond Flick Drummond Conservative, Meon Valley

Merry Christmas, Mr Speaker, and to all those in the House. The UK’s pension funds lag behind their counterparts in the USA, Scandinavia and Australia for investing in technology firms. Can my hon. Friend continue his work on reforms and ensure that more pension fund investment stays in the UK, to boost our tech sector?

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

Under the industry-led Mansion House compact, 11 of the UK’s largest defined contribution pension schemes have signed up to the objective of allocating at least 5% of their funds to unlisted equities by 2030. We believe that could unlock £50 billion of investment in high-growth companies and should help increase returns to savers.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

The Minister will appreciate that the greatest investment that anyone can make is in themselves and their own country—Northern Ireland and all the United Kingdom. What steps can be taken to ensure UK-wide investment by pensions schemes in cutting edge businesses such as Wrightbus and Thales?

Photo of Bim Afolami Bim Afolami The Economic Secretary to the Treasury

There are a couple of things that we need to do. We need to ensure that the industry abides by its commitment to the 5% target. Working with the Exchequer Secretary, my hon. Friend Gareth Davies, we must present the right investment opportunities so that the capital goes into the UK in the right way.