Unlocking the power of Britain’s pensions to truly drive economic growth, says head of Legal and General Affairs ANTONIO SIMOES

What connects delivering better returns for savers in old age, affordable housing, clean energy and creating the growth our economy needs? The answer is pensions.

As discussed during the Budget, tonight’s speech at Mansion House is expected to focus on this area, looking at measures to promote greater local investment in productive assets, achieve consolidation of pension funds to support efficiency and analyze how to unlock large reserves of private capital to strengthen the UK economy.

There is a lot at stake. Last month, the Chancellor set out the challenge facing the economy.

Rachel Reeves was clear that without private investment we would not see the significant long-term growth we all need.

According to a report by the Pensions and Life Savings Association, £1 trillion of pension fund capital is allocated to UK-domiciled assets, deployed mainly in government debt, fixed income assets and listed companies.

Increasing attention is now being paid to how pension funds can be encouraged to allocate more to emerging opportunities that could boost the UK’s economic growth, while benefiting savers and retirees for the future.

As the Government lays the foundations for its growth agenda, pension capital should be at the center of this task.

We must recognize that the financial future of the economy, individuals and the Government are inextricably intertwined.

I want to be able to look back in five years and see tonight’s speech as a turning point that makes pensions work harder for savers, while increasing investment in productive assets and boosting economic growth. We welcome any measure that allows us to achieve these collective objectives.

Pensions are a catalyst for better outcomes. For example, L&G recently launched an Affordable Housing Fund, allowing us to attract more investment into affordable housing in high-need areas across England. These plans put capital to work for the real economy and local communities.

We’ve made a good start here. But with the right reforms we can go much further.

I hope the Chancellor sets out plans this afternoon to make this happen on a wider scale, helping to deliver value for money for scheme members, employers, local taxpayers and, ultimately, the Treasury.

In any announcement today, it is also vitally important that the Chancellor does not lose sight of what pensions are for and the role that pension funds play.

This aims to provide members with good returns on their savings, allowing them to live a happy and healthy retirement.

The goals of better returns and higher investments can and should continue to work together, while balancing the fiduciary duty that comes with managing clients’ money.

This means helping to educate people about what pensions can do for them and supporting pension funds to deliver growth. While cost is important, value is key.

The country, and infrastructure in particular, is in increasing need of investment – ​​up to £50bn in private capital alone over the next two decades, according to the National Infrastructure Commission.

Meanwhile, demand for affordable housing continues to grow and we need to evolve towards a cleaner, greener world.

We simply cannot afford to continue with the status quo and low growth.

Pension reform must deliver tangible results for savers, focusing on greater adequacy.

This is vital. Wealthier pensioners will become more self-sufficient, which will benefit the entire economy.

Right now, about half of working-age people don’t save enough for retirement. By putting savers first, we can realize our broader collective ambitions.

Pensions and pension capital matter to all of us, regardless of our age or occupation. I hope the Chancellor seizes this opportunity and helps us all achieve this.