The government has outlined an intervention in the allocation of the UK's trillions of pounds of pension holdings, after Chancellor of the Exchequer Jeremy Hunt announced that nine of the largest defined contribution (DC) pension schemes had agreed to allocate at least 5 per cent of their default funds to unlisted companies by 2030.
Aviva (AV.), Scottish Widows, Legal & General (LGEN), Aegon, Phoenix (PHNX), Nest, Smart Pension, M&G (MNG) and Mercers have signed the Mansion House Compact, Hunt said, covering over two-thirds of the UK DC workplace pensions.
Speaking at Mansion House on Monday night, Hunt said that this and a number of other measures could reverse the "perverse situation" where overseas investors were backing growth-focused companies more than UK institutional investors. Higher-risk allocations could add over £1,000 a year to an average earner's retirement income, the chancellor said.