Responding to comments made by Chancellor George Osborne in today’s budget, the company’s global chief investment officer, Andrew Kirton, said there was a ‘strong case’ for pension funds to become more involved in ‘good quality’ infrastructure projects.
‘However, we need to see more detail on the platform being developed following the Government's consultation in this area before we can say whether it will be a suitable investment opportunity for our clients.’
Zoe Lynch, partner at Sacker and Partners LLP, said the infrastructure programme was ‘interesting’, given a number of UK pension schemes had already expressed an interest in the area.
But, she said schemes would ‘wait and see’ whether the plans announced by Mr Osborne to consult on long-term and perpetual gilts were ‘interesting for pension scheme investors’.
Mr Kirton echoed her cautious welcome. He said: ‘The Government has a once in a generation opportunity to borrow on really attractive terms for an extended period. It will be interesting to see whether the consultation will result in investment opportunities suitable for pension funds.’
The lack of changes to pension tax relief in the Budget was welcomed by Charles Cowling, managing director of JLT Pension Capital Strategies.
‘It is good to see that the Chancellor has resisted tinkering with the Annual Allowance on pension scheme contributions, as to do so would have been madness. Steve Webb continues to impress as Pensions Minister, and overall the Budget gets an eight out of ten for pensions,’ he said.
Mr Cowling also said the move to review the state pension age was ‘positive’ because it indicated ‘sensible management of legacy assets’ and would ‘help secure the future affordability of pensions’.
‘It is also encouraging to see a more simplistic, single tier State Pension being devised, and the end of earnings related pensions is the right move from the Chancellor,’ he added.
IMA Head of Research and Pensions, Jonathan Lipkin also welcomed the commitment to introduce a single state pension, which he said would help to make the pension system ‘simple, predictable and fair’.
‘As we move towards automatic enrolment, this will help to provide a clear foundation for complementary workplace provision,’ he said. ‘However, to make this really work requires further steps.’
‘One of the things we urge the Government to consider is how a combined pension statement that would bring state and private pensions together could be made available to everyone.
‘This could both improve retirement planning, giving individuals greater certainty, and reinforce a culture in which the pension regime is less subject to frequent and counter-productive changes.’