New government urged to work with pensions and investment industries on UK growth

The Investment Association (IA) has written to Chancellor Rachel Reeves to outline how the investment and pensions industries can support the new government in its goal to “kickstart” growth in the UK.

The letter set out three focus areas where the new government and industries could work together to deliver growth.

These included channelling productive capital into more “thriving” British companies and infrastructure projects, building financial resilience by enabling more people to invest to secure their future, and ensuring more high-value investment management business in the UK.

The IA also proposed several urgent measures that should maximise the industry’s ability to drive financial returns for savers and allocate capital, while being balanced on consumer protection and appropriate risk.

The association said the government should help make investing more inclusive by supporting progress on the advice/guidance boundary review and modernising disclosure rules.

It also emphasised that pension incomes should be supported through a “robust” pensions and retirement savings review, which considers how to increase contribution levels and optimise investment returns to ensure the best outcomes in retirement for savers.

In addition, the IA encouraged pension trustees to consider value and growth opportunities when selecting schemes, instead of only looking at headline costs.

It also supported measures to give public markets a listing regime reform that would aim to increase the UK’s global competitiveness and drive more high-quality internal public offerings that will generate good jobs, improve access to market data and encourage decision-making for traders, investors and policymakers.

The IA suggested that investment in private markets must be facilitated by increasing the number of investable infrastructure projects and using technology to make it easier for more people to invest directly into growing companies and infrastructure projects.

Alongside this, the IA said that investment managers must be supported in funding the transition to net-zero, through a partnership between the public and private sectors to develop a strategic approach to investing in the industries of the future.

Commenting on the letter, the IA CEO, Chris Cummings, said the association “strongly” supported the new government’s ambition to drive economic growth and build the financial resilience of households up and down the country.

“The UK investment management industry is a global success story, has given us a powerful voice in financial services issues on the world stage, and attracted high-quality jobs and opportunities to the UK,” Cummings added.

“We look forward to working closely with the new government to achieve these goals, and in particular in supporting the imminent Global Investment Summit as an important way to signal Britain’s openness to trade.

“There is more our industry can do to boost the UK economy and support its people. Investment is the key to unlocking growth.

“We must act to channel more capital into thriving British businesses and infrastructure projects and to create a nation of confident investors that understand the value of investing their money safely and for the long-term.”

He explained that the “right balance” must be found between risk and safety across the system, and between necessary change and the stability needed for long-term decision making.

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