Andy Briggs, the CEO of Phoenix, the UK's largest retirement savings business, shares insights on the economic outlook and investment strategies for pension funds. He discusses how the UK government is prioritizing infrastructure and startup investments to spur growth. Briggs delves into the challenges surrounding major projects like Heathrow's third runway and the need for collaboration. He also highlights the Future Growth Capital initiative aimed at enhancing local investments, balancing business interests with government objectives.
The UK government's commitment to infrastructure investment is vital for fostering economic growth and enhancing business confidence.
A significant portion of pension assets remains underutilized in productive investments, highlighting the need for improved allocation strategies.
Deep dives
The Drive for Economic Growth
The government's commitment to driving economic growth is essential for improving business and consumer confidence in the UK. Infrastructure investment is identified as a key factor that not only creates jobs but also enhances the attractiveness of the UK for potential investors. Supporting the scaling of startups is equally vital, with initiatives like the European Silicon Valley highlighting the potential for rapid economic development. By leveraging the innovative capabilities of top universities, the government aims to transform academic advancements into scalable business opportunities, driving overall economic enhancement.
Investment Gaps in Productive Capital
A significant disparity exists in the allocation of pension assets towards productive investments in the UK, with only 14% currently directed toward these areas. This starkly contrasts with countries like Canada and Australia, where around 25% to 30% of assets are invested in growth-oriented sectors. Bridging this gap is crucial for both economic advancement and increased returns for savers, particularly within the realm of startup investments. Effective regulation and proactive collaboration between the government, capital providers, and the industry are necessary to address this issue and accelerate capital flow.
Challenges to Infrastructure Projects
Long-term infrastructure projects announced by the government aim to boost the economy, yet immediate concerns must also be addressed to avoid stagnation. For instance, permitting and planning delays have hindered the UK's ability to capitalize on wind energy, which could alleviate energy costs and contribute to solving the current cost of living crisis. Collaboration among government, regulators, and the private sector is imperative to streamline processes and enhance efficiency in project implementation. Reconciling the demands of environmental sustainability with ambitious infrastructure plans presents a challenge that requires careful consideration and innovative solutions.
Phoenix CEO Andy Briggs runs the UK's largest retirement savings business. The Chancellor Rachel Reeves singled out Phoenix as one of the companies driving her infracstructure investment plans. He spoke to Bloomberg's Caroline Hepker and Tom Mackenzie about the outlook for the UK economy and how pension funds should be deploying their capital.