Britain proposes easing rules on pension funds investing in less liquid assets

Economy11 minutes ago (Sep 27, 2021 05:56AM ET)

(C) Reuters. FILE PHOTO: The Bank of England can be seen as people cycle through the City of London financial district, in London, Britain, June 11, 2021. REUTERS/Henry Nicholls/File Photo

LONDON (Reuters) -A cap on how much pension funds can invest in less liquid assets should be scrapped to encourage more investments in longer-term assets to help the British economy recover from COVID-19, a UK-government backed report said on Monday.

Direct contribution (DC) pension schemes face a cap of 35% for investing funds into less liquid assets, one of the most significant barriers to schemes that may want to increase such investments, the report from a working group chaired by the Bank of England, the Financial Conduct Authority and Britain’s finance ministry said.

The Productive Finance Working Group set out recommendations to encourage DC pension schemes to generate better returns for investors.

These types of schemes, the value of which depends on returns from investments, have grown from 200 billion pounds in 2012 to over 500 billion pounds, and are expected to double to a trillion pounds by 2030.

“DC schemes trustees, trade bodies and consultants should consider how increasing investment in less liquid assets could generate greater long-term value for their members,” the report said.

“Greater investment in longer-term productive UK assets, such as research and development, technology, and infrastructure can provide a boost to long-term growth and support an innovative, greener future for the UK.”

Britain proposes easing rules on pension funds investing in less liquid assets

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

More than 1,400 firms went bust last month in England and Wales

The number of businesses going bust in England and Wales jumped last month to its highest level since the start of the pandemic, as...

China launches second crewed mission to build space station

World59 minutes ago (Oct 15, 2021 11:06PM ET) 4/4 (C) Reuters. The Long March-2F Y13 rocket, carrying the Shenzhou-13 spacecraft and three astronauts in China's second...

U.S. offers payments, relocation to family of Afghans killed in botched drone attack

World22 minutes ago (Oct 15, 2021 09:55PM ET) (C) Reuters. FILE PHOTO: The Pentagon logo is seen behind the podium in the briefing room at...

Subscribe here

Latest Posts