Over half of trustees and pension scheme representative (54 per cent) say new tax incentives would be the best way for the new government to encourage pension investment into the UK and drive economic growth.
Meanwhile just under a third (30 per cent) aid the Government must improve the attractiveness of the UK investment market first in order to drive this increased investment into the domestic economy.
These findings came in a webinar hosted by XPS Group of more than 320 pension schemes. It comes as the Labour Government announced a two-stage pension review, with the first phase focused on boosting pension investing into productive finance, to boost the UK economy, with a second phase looking at how to improve retirement security.
The survey also found that almost four out of 10 schemes (39 per cent) said that mandating higher contributions is key to the Government improving retirement security.
XPS also said that just over 23 per cent of respondents supported incentivising “sidecar”, or short-term savings alongside pensions, to enhance retirement security.
XPS Group head of DC advisory Sophia Singleton says: “While the government’s review of DC investment in UK growth is welcome, policymakers must recognise the strengths of existing investment strategies.
“To invest more of DC savings in the UK, clear incentives and new opportunities will be needed. The second stage of the review will also be crucial. Improving the adequacy of savings not only bolsters retirement security but can also drive more pension investment in the UK economy.”
XPS Group partner Wayne Segers adds: “There is only passing mention of private DB pensions in the pension review. It is unlikely that trustees and employers of DB schemes will be persuaded by any Government to add significant investment risk given the hard-fought security achieved over the last 20 years. And the level of members’ benefits in DB does not directly depend on investment returns.
“Rather, the Government should progress changes to surplus rules, ideally as part of the announced Pension Schemes Bill. Previous XPS analysis showed that safely generating surplus can create £100 billion of value for members and employers that in turn can help our economy.”
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