In a powerful intervention ahead of the autumn Budget, over 100 of Britain's most influential business leaders have issued a stark warning to Chancellor Rachel Reeves: compel pension funds to invest in the UK or risk continued economic stagnation.
The high-profile coalition, including executives from FTSE 100 companies and major employers, argues that Britain's pension system is failing to support domestic growth while other nations benefit from their retirement savings.
The Scale of the Problem
Currently, UK pension funds invest just 4% of their assets in British businesses - a startlingly low figure compared to international counterparts. Canadian and Australian pension funds, by contrast, allocate approximately 25% of their portfolios to domestic enterprises.
This investment gap has created what business leaders describe as a "vicious cycle" where promising UK companies struggle to secure growth capital, ultimately limiting returns for pension savers.
What Business Leaders Are Demanding
The signatories, representing companies with combined market value exceeding £500 billion, are calling for specific measures including:
- Mandatory disclosure requirements showing pension funds' UK investment levels
- Clear targets for increasing domestic investment over defined timeframes
- Regulatory reforms to remove barriers to long-term UK investment
- Incentives for funds that demonstrate commitment to British assets
The Political Context
This demand places significant pressure on the new Labour government, which came to power promising economic growth but now faces tough choices about intervention in private markets. The Treasury's response suggests ministers are carefully considering the proposals.
With the Budget announcement expected within weeks, the stage is set for what could become one of the most significant reforms to UK pension investment in decades.
