Rishi Sunak appears to be pushing ahead with plans to encourage pension funds to divert up to £500bn into infrastructure projects and start-up companies in order to boost the economic bounce-back from Covid.

His “Long-Term Asset Fund”, announced last November, is planned to launch before the end of 2021.

The UK has some £2.2trillion locked up in retirement pots; but, unlike other countries with strong private pension sectors, the safety-first approach taken by the funds means that relatively little finds its way into start-ups in particular.

A report in The Mail on Sunday (27 June 2021) revealed that “Treasury officials have met with senior figures in the pensions industry over the controversial scheme that would unlock some of the and parcel it out to fast-growing businesses, transport projects, real estate and carbon-friendly investments.”

Moreover, the report went on to state that: “Industry sources said the Government and regulators had discussed how a portion of workplace pension schemes – those which staff are compelled to join – would go into a fund set for launch this year.” This could mean that billions of pounds worth of workplace pensions will automatically be channelled into the fund.

There are concerns that some of these investments could be high risk – such as start-ups – while pumping money into long-term infrastructure projects would make the investments relatively illiquid.

What is your view on whether the Government should be having a say in where YOUR pension fund should be invested? Should some of it be used to fund infrastructure projects and start-ups? And would you move your investment if your provider travelled in that direction? Let us know by emailing: support@retireesy.co.uk