The Pensions and Lifetime Savings Association (PLSA) and the Association of British Insurers (ABI) have called on Government to boost UK growth through greater pension investment in four key areas.

Chiefly they called for better adequacy in DC pensions and a bigger pool of investable capital.

The PLSA and ABI said most private sector pensions are DC but low contributions risk retirement shortfalls.

The organisations also said regulations should be made to work better for investment and savers. In short, regulation must make it as simple as possible to invest in illiquids where it is in the interest of savers.

The government should also increase investment opportunities, they said, to develop an effective pipeline of assets with good risk reward profiles for pension schemes to invest in UK growth.

Finally they said there should be a continuing focus on consolidation to ensure that consolidation takes place in the best interests of members. 

Nigel Peaple, director, policy & advocacy, PLSA, said: "UK pensions already invest around £1trn in the UK economy, in particular through their ownership of Government and corporate bonds and listed equities.

“We have picked out four areas for action: higher pension contributions, the right regulation, Government action to support investment opportunities and measures that enable the consolidation of pensions that is already underway.”

Dr Yvonne Braun, ABI director of long-rerm savings policy said: “Together, ABI and PLSA members safeguard £2.5 trillion of assets for the retirements of millions of workers in the UK.

“We need to ensure people save enough, regulation works, there is an effective pipeline of investment opportunities, and much greater consolidation. All this will drive UK growth.”

The organisations said that progress has been good, but more needs to be done. Here's more detail from their statement published this morning:

"The pensions sector is complex. Workplace pension schemes consist of open and closed DB schemes, and DC schemes that operate under different legal arrangements. There are also individual personal pensions saving outside of the workplace. Policy levers which are needed for DB are very different to what is needed for DC, and it is vital to carefully consider not only the short-term implications of interventions, but also the long-term effect they could have.

"We recognise that the Government has worked to address the views of the pensions industry to support UK growth. We support the Mansion House Compact as a positive step towards increasing investment in private markets and are actively involved in the Pensions and Private Capital Expert Panel to facilitate more DC pension investment into private assets.

"We were pleased to see the Chancellor’s three golden rules announced in the Mansion House speech, particularly the onus placed on putting savers at the heart of any approach. More pension investment in scale-ups will certainly have an impact, helping them grow and thrive, and this is at the core of the Compact. Investments in other private assets such as private credit and infrastructure, also impact scale-ups and will help enable the UK to achieve its net zero targets if they are invested in climate solutions.

"The industry continues to work hard to find ways to diversify investments into less traditional assets to deliver the best consumer outcomes possible and help boost growth."