At the beginning of the month the UK government launched a consultation on the first phase of the Pension Investment Review which aims to boost investment, increase pension pots and tackle waste in the pensions system.

The review focuses on defined contribution (DC) workplace schemes and the Local Government Pension Scheme (LGPS) and highlights three main areas: scale and consolidation; costs versus value; and investing in the UK.

The review consultation closed on 25 September, with the industry warning the government against taking a one-size-fits-all approach and instead to consider a more flexible approach to investment.

Economic growth

With the UK focused on driving economic growth, the City of London Corporation has called on the government to develop a financial and professional services strategy to unlock up to £7.7bn in additional capital from foreign sovereign investors by 2030.

London

City of London Corporation has called for the UK government to develop a financial and professional services strategy to unlock up to £7.7bn in additional capital from foreign sovereign investors by 2030

It pointed out that over the past decade, sovereign wealth and public pension funds that have opened a UK office have more than doubled their UK investments compared to the five years preceding their presence in the country. This, according to the corporation, has led to an additional £13.4bn investment across the UK in key growth areas such as infrastructure, innovative tech sectors and renewable energy with 92 investments by these firms spread across 36 different cities and towns outside London.

Sticking with economic growth, Schroders Capital has this month received regulatory approval from the UK’s Financial Conduct Authority (FCA) to launch its third Long-Term Asset Fund (LTAF) and the first dedicated to UK venture capital.

DB Funding Code

The UK’s defined benefit (DB) funding code came into effect on 22 September and The Pensions Regulator (TPR) published an amended Statement of Strategy the following day setting out the information trustees need to submit as part of planning and managing their DB scheme funding position. After consulting on the original document back in March, the regulator has listened to the industry’s feedback and introduced a number of amendments.

De-risking

After completing first external transaction in July, Royal London has cemented its entry into the bulk purchase annuity (BPA) market by establishing a team of 40 experts led by director of BPA solutions Paul Bowker, to focus on working with trustees and advisers on transactions of up to £500m.

The bulk annuity market currently consists of 11 participants, with Brookfield reportedly awaiting approval from the Prudential Regulation Authority to set up a new insurer.

It is expected that this year the market will close at £40-50bn, making it the second-busiest year ever, after 2023 closed just shy of £50bn. However, the predictions wary between insurers, with PIC anticipating it could actually go as high as £60bn.

Items to note:

Pamela Kokoszka

UK Correspondent

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Pamela is IPE's UK correspondent. Before joining IPE in May 2023, she spent five years writing about the insurance industry. During her career so far she won awards for Most Promising Newcomer in 2020 and Best Investigative Article in 2022 from the British Insurance Brokers Association, and was also highly commended at the WTW Media Awards for Insurance Features Journalist of The Year.View full Profile

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