Chancellor Jeremy Hunt has been urged by the Pensions and Lifetime Savings Association (PLSA) not to force retirement schemes to invest in riskier and complex assets, according to The Times.
It’s said the chancellor’s preference would be for Britain’s “highly fragmented” pensions market — which the report states has roughly 28,000 defined contribution schemes — to be consolidated so as to boost investment in UK companies.
Last year, up to 35 million savers had access to the PLSA’s Retirement Living Standards through their pension scheme’s communications. In total, 124 organisations were using the Standards, including over 100 pensions schemes.
Hunt is expected to give more details in his annual Mansion House speech to City of London grandees in July, the report said.
He has also “left open the idea of ‘mandating’ pension funds to make certain investments if he cannot achieve the kind of consolidation in the industry he is seeking”.
Nigel Peaple, director of policy and research with the Pensions and Lifetime Savings Association, told The Times:
“Trustees are adamant that their role is to look after the savings of their members.
Trustees are open minded about what we can do collectively to help the UK economy but it is essential that this operates in the interests of savers.”
In the same article, Hunt said, speaking on a visit to Washington, that “Australia and Canada have found a way of making sure they get better returns by consolidating their pension fund industry in a way that makes it easier for them to invest in unlisted and potentially higher-growth vehicles”.