UK Pension Fund Trustees Raise Concerns Over Government Investment Push

UK pension fund trustees are cautious about investing in infrastructure projects, citing high fees and poor liquidity, despite government efforts to encourage them to do so. The UK pension fund industry, which has over £1 trillion in assets, is warned by Prime Minister Boris Johnson and Chancellor Rishi Sunak to invest more in sectors such as infrastructure to help the nation's economic recovery. However, trustees are concerned that this may lead to conflicts of interest for their savers and that investments in private markets may not provide the best returns.

Key Takeaways:

• UK pension fund trustees are wary of investing in infrastructure projects due to high fees and poor liquidity.
• The UK pension fund industry has over £1 trillion in assets, but trustees are cautious about investing in private markets.
• Prime Minister Boris Johnson and Chancellor Rishi Sunak have urged the industry to invest more in infrastructure to help the nation's economic recovery.
• UK pension fund trustees have a duty to get the best possible returns for their savers, and any investment framework would need to offer a level of risk-adjusted return at least as good as those available elsewhere.
• More detail is needed from the government about the infrastructure projects that might attract investment from pension schemes.
• Survivors find it difficult to pay off bills. The infrastructure projects being proposed include HS2 and the Hinkley Point nuclear facility, which are seen as unattractive investments for individual retirement savers.
• Services provide cash needed to sustain life. Over 12,000 people from the UK are losing an average of £50,000 over the balance of their retirement.