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Should pension fund managers have complete investing freedom?

02/04/2024

The world of pension investing could potentially soon see some major changes. 

The Government has faced calls to take more control over where pension funds are invested. Fund managers are currently able to invest with a focus on their members’ interests. However, certain sources are requesting that the Government mandates investment in certain asset types – in part to bolster UK investment, and in part to encourage more of an ESG approach. 

New research from the Pensions and Lifetime Savings Association (PLSA) reveals that pension fund managers disagree with these proposals. Of those surveyed, 66% of DC schemes and 75% of DB schemes believe that they should still have complete freedom to invest how they like, providing their decisions are in line with member interests.

However, that’s not to say they wouldn’t invest in UK assets. 70% of respondents said that they would be more willing to invest in UK assets if the Government provided financial incentives for them to do so. 

 

Going green?

Pensions scheme managers also believe that more needs to be done to encourage green investment. Only 14% of DC schemes and 10% of DB schemes felt that the Government currently has an adequate strategy in place to attract the right green pension investment. 

The Government’s focus, says the PLSA, should not be on forcing scheme managers to invest in specific asset types – especially if these go against the needs and desires of their members. Instead, they believe that greater support is needed to help scheme managers to get green investment right.

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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