UK pension savers back investment in Britain's infrastructure

Key takeaways

UK pension savers support pension investment in British companies, housing and infrastructure, provided strong retirement outcomes remain the priority.
Many savers believe greater investment in essential infrastructure is needed to support economic growth and quality of life.
Savers recognise a role for both UK pension capital and trusted international investors in meeting the country's infrastructure needs.

Britain’s infrastructure challenge is often framed in terms of policy, funding gaps and economic growth. But new research suggests many UK pension savers see it in more immediate terms: the homes, transport, energy, healthcare and digital networks that shape daily life, and the kind of country they want their savings to help build.

That is the central finding of a new report, Building the UK's Future: The Role of Pension Savings in Infrastructure, from IFM Investors in partnership with Nest and Border to Coast Pensions Partnership. The report explores UK savers’ views on investing their retirement savings in British infrastructure, companies and housing. It finds that many recognise the need for greater investment in UK infrastructure and support pension capital playing a role, provided robust outcomes for members remain the priority.

Highlights

1. The report found savers don’t just care about their long-term financial outcomes – they also care about how their money is invested.

Nearly eight in 10 respondents said their retirement savings should help build a stronger UK economy.

Seven in 10 said pension funds have a responsibility to support UK infrastructure and economic growth.

Two-thirds said they would feel proud knowing their pension was helping to fund projects across the country.

2. This reflects a wider view that there is a relationship between investing in infrastructure and quality of life.

Nearly three-quarters said poor infrastructure affects their daily lives.

Only 29% believe the UK is investing enough to meet its infrastructure needs.

Participants also linked investment in essential assets with lower cost-of-living pressures, stronger job creation, economic growth and more resilient communities.

3. Materials like case studies can change the way savers think about how their pension is invested.

Support for infrastructure investment rose from 55% to 72% after savers were shown case studies and examples.
Four in 10 savers said the information provided made them feel more positive.
Nearly two-thirds were more supportive of local infrastructure investment once they understood the tangible benefits it can deliver.

Source: Research conducted by Ignition House, using a nationally representative survey of 2,000 UK defined benefit and defined contribution pension holders with a week-long qualitative study of 20 savers.

For long-term investors, this is significant. We believe pension capital is naturally aligned with infrastructure because both operate over extended time horizons. Transport, energy, housing and digital infrastructure are assets that can serve communities for decades, while also offering the potential for long-term, risk-adjusted returns for pension members.

The research is also timely. It comes at a time when policymakers are exploring how defined contribution schemes can unlock more private market investment for UK growth, while the UK Government’s efforts to attract institutional capital from overseas underlines the importance of mobilising both domestic and international investment.

Importantly, the findings suggest savers understand that domestic capital alone cannot meet the UK’s infrastructure needs. Many were open to overseas investment, particularly from countries such as Australia and Canada, which were seen as stable democracies, close allies and trusted long-term partners able to complement UK pension capital.

With the right investment opportunities, policy settings and partnerships between UK pension schemes and trusted global investors, we believe pension capital has the potential to finance the infrastructure Britain needs for decades to come.