The Chancellor Rachel Reeves has threatened to force the pension industry to only invest in the UK, she was warned that such a move will result in “poor value” for people’s retirement plans.
Rachel from accounts is demanding funds managing pensions to invest billions into the UK’s infrastructure.
The Chancellor did receive an agreement from 17 providers, but Reeves has warned she could make it compulsory.
Reeves has been urged not to do this and they told the House of Commons Work and Pensions Committee Labour has to make sure that investing in the UK will only provide savers with positive returns.
Joe Dabrowski, Deputy Director of the Pension and Lifetime Savings Association, warned should the Chancellor make this compulsory it will end up being “poor value for money.”
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He added, “There’s a really important question of trust. Trust in the pension system is sometimes fragile, and the risk that people perceive government interference in their investments is a real one.
“Savers when they are asked generally support investing more in the UK but they don’t generally support the government directing that or being perceived to direct that in any way.”
The shadow chancellor Mel Stride warned “pension savings should never be there to dig a chancellor out of the economic hole that she has made”.
He added, “Reports that the Government intends to take new powers to mandate pension funds to allocate minimum amounts to specific classes of assets should be a matter of great concern.”
Rachel Croft, Chair of the Association of Professional Pension Trustees, said, “When looking at investment decision-making we will look at what investments in front of us are likely to get the best return for our members.
“Forcing us to invest in the UK solely may run counter to that.”
Croft told MPs at the Committee, “As trustees our focus is on seeking the best possible member outcomes so we would be against any form of mandation that would prevent us from achieving that objective.”
