Britain's proposal to redirect £50 billion of pension fund cash into start-up firms has been met with enthusiasm by the financial services industry, but experts warn that it could put savers at
risk. The reforms, announced by finance minister Jeremy Hunt, aim to channel a larger portion of the £4.6 trillion capital managed by the pensions and insurance sectors into underperforming UK assets by 2030. While the move is seen as crucial for supporting struggling entrepreneurs, critics argue that there are no guarantees of a positive outcome.
They highlight concerns about the impact on retirees, who may face worse retirement outcomes due to years of investing in low-risk assets. Additionally, the reforms offer little hope for those nearing retirement in the near term.
The government is under pressure to revive domestic investor interest in key industries such as fintech, biotech, life science, and clean technology. However, experts caution that success will depend on concrete actions and implementation. Photo by Ted Eytan, Wikimedia commons.