Nearly eight in 10 UK pension savers want their retirement savings to help build a stronger UK economy, according to research published by IFM Investors, NEST and Border to Coast Pensions Partnership.
The report Building the UK’s future: The role of pension savings in infrastructure highlights public support for pension funds investing in UK businesses and essential infrastructure, including housing, healthcare, life sciences, renewable energy, transport, utilities and digital infrastructure.
Conducted by Ignition House, the research surveyed 2,000 UK defined benefit (DB) and defined contribution (DC) pension savers.
It found that only 29% were confident the UK was investing enough to meet its infrastructure needs, while 70% believed pension funds had a responsibility to support infrastructure development and economic growth.
Some 69% said they would feel proud knowing their pension was helping to fund projects across the UK, while 77% agreed that infrastructure investment would help the economy grow and create jobs.
The findings come as the Mansion House Accord focuses attention on how DC pension schemes can unlock more private market investment to support UK growth.
The government’s introduction of a dedicated ‘Supers Unit’ to attract institutional capital from Australia has also highlighted the role of overseas investors in financing the country’s infrastructure needs.
According to the report’s authors, savers recognise that domestic capital alone cannot meet the scale of the challenge. The research found openness to overseas investment, with Australia and Canada attracting strong levels of trust as stable democracies, close allies and long-term partners.
Elizabeth Fernando, chief investment officer at NEST Invest, said: “These findings echo what we heard through NEST’s inaugural members’ assembly, where members indicated support for investment in the UK where it can deliver strong long-term value and contribute to economic growth.”
Fernando said she hoped the findings would encourage more pension schemes to consider how pension capital could help finance the housing, transport, energy and digital infrastructure the country needs while generating attractive returns for members.
Amarik Ubhi, senior portfolio manager at Border to Coast, added: “While risk and return considerations remain paramount, we recognise the additional benefits that come with UK investment, and it’s important the investment ecosystem supports a greater pipeline of investable opportunities.
“The vast majority of our two million members live, work and retire in the local areas where they have worked. So improved UK infrastructure, along with all the economic, social and practical benefits that come with such projects, will directly improve the quality of life for members. This has long been part of the DNA of the LGPS and why UK investments represent nearly a third of our partnership’s total assets.”
Phelim Bolger, head of client services, UK & Ireland, at IFM Investors, said: “This research suggests pension savers recognise the role patient, long-term pension capital can play in funding infrastructure that supports growth, strengthens communities and improves everyday life.
“As one of the UK’s largest sources of foreign investment, Australian pension capital already helps finance the essential infrastructure communities and businesses rely on. These findings reinforce the value of long-term international investment working alongside UK pension capital to support future growth.”
