Rachel Reeves humiliated as survey shows Brits ‘reject her pension gamble!’ | Personal Finance | Finance

Chancellor Rachel Reeves, like her predecessor, Jeremy Hunt, has been pushing UK pension funds to invest more in the UK economy, but experts fear this plan could backfire.

Some of the UK’s largest pension funds will be expected to use more of savers’ cash to help build UK start-ups via investment in so-called productive finance, private markets, and private equity. Ms Reeves claimed that the plans could boost UK growth by billions of pounds.

However, research from PensionBee has found that just 8% of savers are willing to invest in these high-risk assets.

PensionBee surveyed 1,000 savers and found that only 15% prioritised investing in UK PLC, the term commonly used to describe the country’s overall economy, suggesting that the Government’s recent calls to direct pension savings into UK businesses are not a major priority for many.

Meanwhile, 26% of savers favour a low-risk strategy, preferring to avoid market volatility where possible, and a further 17% took an even more cautious stance, wanting no risk at all, even if it meant their pension savings would see minimal growth.

Pension savers are open to investing in more complex assets, such as private equity or infrastructure, if they support UK economic growth, but they said they would only support such investments if the associated fees and risks were made completely clear to them.

The remaining 41% either wanted their pensions to be invested in simple and transparent assets that they could easily understand or were unsure about their preferences.

Clare Reilly, chief engagement officer at PensionBee, said “Brits reject pension gamble.

“These findings highlight that UK pension savers want stability and transparency, not speculation. The majority are looking for steady, reliable growth, with most favouring a balanced, moderate-risk approach.”

“This demonstrates a clear preference for managing risk without sacrificing long-term returns. Savers want the confidence that their pension is growing steadily over time, and they demand transparency to ensure they fully understand where and how their money is being invested.”

Many pension experts claim that investing in more risky assets requires huge scale in order for savers money to be cushioned from the large number of companies that fail to get off the ground.

Private equity, which is one of the assets Reeves has earmarked for more investment is a niche and expensive asset.

Private equity managers charge hefty annual management fees as well as carry/performance fees of 20 per cent over what is known as a hurdle rate.

And there are other fees over and above these with other costs including spending time doing more due diligence of firms. The trustees of pension funds also have to prove that they are getting value for money as well as growth and that they are not risking pension savers’ assets.

Pension insiders have said that the idea of ivnesting in UK PLC is a worthwhile one but the government will need to reassure investors and pension funds, possibly by looking at changes in regulation, that they can invest in these assets without breaking their commitment to savers.