David Brooks, Head of Policy at leading independent consultancy Broadstone comments on the latest Pensions Investment Review.
“The Pensions Investment Review is to set out an explicit direction of travel towards mandating pension scheme investment into UK assets and infrastructure. This is a risky move – not least because the Treasury itself has had to admit that any gains for savers are unclear and likely to be limited. Savers will naturally be worried that their pension pots will not necessarily be invested with the best returns in mind but rather required to achieve specific allocations to Treasury-dictated geographies and sectors.
“The industry appears well-aligned with the Government’s aims – provided the opportunities exist to invest. Mandating investment appears to provide a point of collision if the Government believes the golden opportunities exist but the industry disagrees.
“It is pleasing that the Chancellor has softened her stance towards schemes under £25billion will be allowed to continue operating if they see a road path towards reaching that size by the end of the decade. It further sets the scene for significant consolidation right across the market.”
