Chancellor announces pension reforms to boost capital into high-growth businesses

Last week, the Chancellor announced next stages to the Pension Reforms. Reforms will hope to see more than £50 billion investment into UK infrastructure and fast-growing businesses. techUK welcome these reforms to drive more patient capital into businesses at the forefront of emerging technology.

What do the reforms mean?

Reforms also mark a significant milestone to address the UK's growth capital gap. Introduced through the Pension Schemes Bill, they will mean all multi-employer Defined Contribution pension schemes and Local Government Pension Scheme pools operate at megafund level, managing at least £25 billion in assets by 2030.

This takes steer from international counterparts Australia and Canada where the size of megafunds allows pension funds to invest in big infrastructure projects and private high-growth businesses. Such a system in Australia and Canada have driven higher returns for savers. 

These changes will aim to drive more investment directly into promising scale-up businesses. Over £50 billion has been secured through the recent voluntary commitment from pension funds to invest 5 percent of assets in the UK and new local investment targets for Local Government Pension Scheme authorities.

Alongside this, the British Business Bank's British Growth Partnership (BGP) also recieved regulatory approval from the Financial Conduct Authority. The BGP aims to encourage more UK pension fund and other institutional investment into the UK’s most innovative companies. London CIV has become the first Local Government Pension Scheme (LGPS) pool to announce its intention to work with the British Business Bank on the launch of the British Growth Partnership. The initial BGP fund includes a commitment from the British Business Bank to invest in some of the highest potential opportunities in the Bank’s venture capital pipeline.

What next?

techUK were pleased to sign an Open Letter, with others across the scale-up ecoystsem, written directly to the Chancellor and led by the ScaleUp Institute. This welcomed the Pensions Investment Review and the Government's commitment to double the number of UK pension megafunds by 2030 - techUK further called for this in our Scale-Up Action Plan and UK Tech Plan

techUK look forward to continuing to work with the UK Government, and our members, to improve the growth capital landscape and support scaling tech firms to scale and stay in the UK.

Julian David OBE, techUK CEO, responded: 

Julian Quote.png

 

For further information, reach out to the Digital Economy team:

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Archie Breare

Archie Breare

Policy Manager - Skills & Digital Economy, techUK

 


Antony Walker

Antony Walker

Deputy CEO, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Archie Breare

Archie Breare

Policy Manager - Skills & Digital Economy, techUK

Alice Campbell

Alice Campbell

Head of Public Affairs, techUK

Nimmi Patel

Nimmi Patel

Head of Skills, Talent and Diversity, techUK

Tess Newton

Team Assistant, Policy and Public Affairs, techUK

Audre Verseckaite

Audre Verseckaite

Senior Policy Manager, Data & AI, techUK

Theophile Maiziere

Theophile Maiziere

Policy Manager - EU, techUK

Oliver Alderson

Oliver Alderson

Junior Policy Manager, techUK

Jake Wall

Jake Wall

Policy Manager, Skills and Future of Work, techUK

Sabina Ciofu

Sabina Ciofu

Associate Director – International, techUK

Daniella Bennett Remington

Daniella Bennett Remington

Policy Manager - Digital Regulation, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Regulation, techUK

Daniel Clarke

Daniel Clarke

Policy Manager for International Policy and Trade, techUK

 

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