Government says consolidation of pension schemes could enable greener investments

It suggests defined contribution schemes have the benefit of being able to direct funds towards longer-term, illiquid investments such as housing, infrastructure and green infrastructure

The government has launched a consultation that will work to explore how pension schemes could invest in greener technologies and infrastructure.

The proposed measures would encourage pension schemes to invest in a more diverse range of long-term assets and could support the consolidation of smaller pension schemes into larger schemes.

The government says this would increase the share of assets invested into large, defined contribution (DC) schemes, which have the benefit of being able to direct funds towards longer-term, illiquid investments such as housing, infrastructure and green infrastructure.

Guy Opperman, Minister for Pensions and Financial Inclusion said: “We want all pension scheme members to benefit from efficient administration, first-class investment governance and access to diversified investment strategies.

“The UK has a world-class occupational pension system. We want to encourage scale and innovation by pension schemes and help drive new investment in important sectors of the economy as we build back better.

“The UK is committed to leading the way in the provision of green technology and infrastructure and we want pension funds to be at the forefront of taking advantage of these long term opportunities.”

The consultation is open until 30th October 2020.

If you enjoyed this story, you can sign up to our newsletter for future Net Zero.

Latest Podcast