Chancellor's gambit

In his Manion House reform speech in last July, UK Chancellor Jeremy Hunt announced a voluntary pledge to commit 5% of UK pension funds in UK equities and private markets. The pledge included nine pension funds, with combined assets of GBP 400 billion, part of the GBP 2,500 billion UK pension market, the largest in Europe. To further these aims, the British Business Bank is now launching a new GBP 7 billion fund to help pension funds navigate private markets, and allow the UK to retain start-ups under British ownership. The shake-up comes after mounting complaints that regulation caused demand for UK equities to fall dramatically, and that compared to other countries, UK pension schemes invest much less in private markets, hurting UK growth and pensioners alike. The Chancellor shied away from regulation, but detractors point to higher fees and reduced investment flexibility as pitfalls to the Chancellor’s ambitions.

Source: WTW Thinking Ahead Institute, Global Pension Assets Study, 2023.