Chancellor Rachel Reeves has refused to rule out compelling UK pension funds to invest in domestic assets, escalating tensions with the pensions industry just hours after the announcement of the new £50 billion Mansion House accord.
The government had celebrated a voluntary commitment by 17 of the UK’s leading defined contribution pension providers to invest at least 10% of their default funds in private markets by 2030 — with half of that, an estimated £25 billion, channelled into UK-based investments. But while Reeves praised the agreement as a milestone, she also left the door open to introducing mandates if voluntary progress stalls.
“I’m never going to say never,” Reeves told Bloomberg Television. “But I don’t think it’s necessary.”
Her remarks have sparked unease within the pensions sector, which has long opposed any move to mandate asset allocation, arguing that such a step would conflict with trustees’ fiduciary duty to act in the best interests of members.
Sources close to the Treasury suggest the upcoming pensions investment review — due in the coming weeks — will recommend granting the government temporary powers to enforce binding investment targets if voluntary commitments fall short.
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