Pension schemes could be incentivised, say industry experts

The consensus was revealed during a recent webinar organised by Cushon on the post-election pensions landscape

Industry experts agree that UK pension schemes could be incentivised or even required to invest much more in UK assets post-general election, according to Cushon, with the debate increasingly focused on how far the incoming government will go on this issue.

The consensus was revealed during a recent webinar organised by Cushon on the post-election pensions landscape.

Indeed, Cushon strategic adviser, Julius Pursaill, said that there is broad consensus about the need to find probably very large sums of capital to drive the growth agenda, and more generally to invest in UK societal infrastructure.

And whilst it is not clear where exactly this large sum of money is going to come from, Pursaill proposed that all parties will view pension fund assets with interest, and consider what steps they might take in order to release some of those assets to flow into UK growth and societal infrastructure investments.

LangCat director of public affairs, Tom McPhail, agreed, arguing that whether it's Conservatives, Liberal Democrats or Labour, there is a consensus on the direction of travel.

Now it is okay for governments to intervene in this space and direct what pension funds do with these assets, it is going to happen whoever wins the next election, McPhail added.

Really, all we are debating about is how it happens and how far down this road we go, he added.

One potential approach, raised by former pensions minister and Cushon advisory board member, Ros Altmann, is to mandate a minimum percentage of new pension contributions to be invested in the UK in exchange for pension tax relief.

This could be 25% in domestic listed or real assets, for example, which still leaves 75% available for non-UK allocations.

According to Altmann, this could help "kick-start a virtuous circle for UK markets and growth", as well as build a stronger economy for pension scheme members to retire into.

It is astonishing to me that our pension funds are not required to invest anything at all in UK firms, she added.