A think tank whose backers include British asset managers and investment banks has urged the government to force defined contribution (DC) pension schemes to increase the exposure of their default funds towards UK stocks dramatically, in an effort to rescue Britain’s faltering equities market.
The report by New Financial and the Capital Markets Industry Taskforce claims that making DC workplace plans allocate between 20 and 25 per cent of all the equity investments within their default strategies towards UK companies, rather than taking “a strictly ‘global market-weighted’ approach”, would be “significantly less challenging or politically charged than mandating the asset allocation of pensions”, since workers would be able to opt out.
However, about 96 per cent of members remain in the default investment strategy, according to research by the Pensions Policy Institute.
The research suggested that raising the allocation of…
