Boris Johnson and Rishi Sunak will urge UK pension schemes to back Britain’s “entrepreneurial spirit” with billions of pounds of savers’ funds to fuel the economy’s post-pandemic recovery in a message to investment bosses.
The prime minister and chancellor will issue a joint call to action on Thursday aimed at “igniting an investment big bang” that would “unlock the hundreds of billions of pounds sitting in UK institutions”.
Citing the success of long-term investment programmes by Australian and Canadian pension schemes, Sunak and Johnson will say that British pensioners are missing out on “better retirements” after investors focused too heavily on the returns from stock market listed companies.
Critics warned that pension schemes would become riskier and more expensive to run and accused the prime minister of failing to understand how they worked.
John Ralfe, an independent pensions consultant, said: “This is 90% hot air from the prime minister.
“Defined benefit pension schemes need assets that generate a guaranteed inflation linked return to pay guaranteed pensions. Most of the things the PM is banging the drum for don’t do this.
Author(s): Phillip Inman
Publication Date: 4 Aug 2021
Publication Site: The Guardian UK