Markets by Trading view

UK government throws down the gauntlet to institutions for a ‘big bang’ of UK investment


Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:

‘’The UK government has thrown down the gauntlet to institutional investors, challenging them to reassess their lack of love for UK assets. During a week when more overseas companies have circled British firms with acquisition deals coming thick and fast, it’s clear that the UK stock market is still perceived as underappreciated compared to US and European peers. Overseas pension funds are far more likely to benefit from long term UK investments than their British counterparts and this is what the government is intent on changing.

Britain’s Prime Minister and Chancellor want to see a big bang of investment which would provide a slow burn of capital heat to propel Britain’s recovery from Covid and its long term growth, but many institutional investors, and in particular pension funds, would argue the kindling needs to be laid first before the spark can take hold. That would include the removal of the cap on fees that defined contribution schemes can charge to ensure they are not over penalised for over performance, and that does now appear to be in hand, with the Department for Work and Pensions set on reforming this. The launch of the UK infrastructure bank should also help light the touch paper, to encourage joint investment in long term green schemes. But the biggest change is likely to come with the revving up of a new vehicle for investment management – the long term asset fund –  opening up possibilities of investment which until now have been restricted for UK pension funds.

We would expect many retail investors also to be interested in investing in more long term projects – particularly in powering the green industrial revolution and helping the UK become a science and tech superpower. We welcome their inclusion and the key to this will be to consider retail investors’ particular requirements and perspectives, ensure value, and create well governed products which deliver good outcomes. There will be keen eyes trained on the detail which is due to be released by the government in the run up to the Global Investment Summit in October.’’

About us

Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.

Our purpose is to empower people to save and invest with confidence and help them build their financial resilience over the long-term. We provide a lifelong, secure home for people’s savings and investments that offers great value and an incredible service making their financial life easy.

Clients rate our service highly, 90% say we are good, very good or excellent. Our expert research has been helping investors for almost 40 years through thick and thin.

In 2018, we also launched Active Savings, an online cash savings platform that lets savers move money easily between partner banks and building societies to help their money work harder without the hassle.

Find out more about HL and our history, what it’s like to work with us, and how we support our community, including our response to the COVID-19 pandemic.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts


Write your email to verify subscription


Sign up for our free newsletter and receive the latest banking and fintech stories, straight to your inbox - every week