UK pensions invest less in alternative assets than any other P7 economy and UK insurers are less invested in real estate, private equity, infrastructure and other alternatives than many of its global counterparts. This is despite the fact that the UK’s pension assets are the second largest in the world, and UK insurance investments are the second largest in Europe.

UK pensions invest less than half as much, proportionately than other large pension economies, and UK insurers are second to last in Europe when it comes to investment in alternatives like infrastructure and private equity.

To address this problem, Government must urgently reform both Solvency II and the DC pension market, pushing consolidation in pensions to encourage investment in alternative assets.

The Government should also commit to devolving the full suite of strategic planning powers to local mayors, and create an Institutional Growth Fund, so insurers and pension funds can pool resources for growth capital investment.

This report is not urging pensions to take rash decisions, but rather for the Government to ensure that the regulatory environment and market structures can facilitate as wide a range of possible investments as possible, so insurers and pensions can make the right choices for their scheme members and policyholders.