The U.K. retirement industry has urged caution over announcements in the nation’s spring budget statement by Chancellor of the Exchequer Jeremy Hunt, with proposals including the establishment of a unifying “pot for life” and a move to mandate disclosures of how much of a portfolio is invested in the U.K.

Hunt confirmed that the U.K. government was to continue with its retirement “pot for life” concept — allowing participants to request that new employers contribute into an existing retirement plan — first announced last fall. However, while Hunt referred to the concept as a more concrete notion in the autumn statement, the most recent budget only committed to “exploring” the idea, and only if it can ensure better outcomes.

Iain McLellan, director at consultant Isio noted that this was a “complex area,” and while the majority of the industry raised significant concerns in an earlier consultation period about the introduction of such a scheme, McLellan said it could also simplify retirement planning for many savers.

But Steve Webb, a former Pensions Minister and now a partner at consultants LCP, said: “From a heavily trailed announcement in the autumn and talk of a new ‘legal right’, today’s budget simply talks about ‘exploring’ the idea, and needing to be sure first that it would improve things for savers. Once we see the full consultation response, where there was overwhelming opposition from consumer groups and industry experts, it is to be hoped that this idea will now be quietly dropped.”

Hunt also confirmed a move by the U.K. government to obligate defined contribution plans to disclose how much they invest in domestic businesses. As part of last year’s Mansion House Compact proposals, the government had already encouraged DC plans to invest 5% of assets in ventures that help grow the U.K. economy.

“I remain concerned other markets such as Australia generate better returns for pension savers with more effective investment strategies and more investment in high quality domestic growth stocks,” Hunt said in the budget announcement. “I will introduce new requirements for DC and local government pension funds to disclose publicly their level of international and U.K. equity investment.”

There are currently no plans to make more national retirement plan allocations within the U.K. sector legally binding, leaving questions remaining on how Hunt will look to achieve such targets, sources said.

“The Chancellor’s announcement requiring schemes to disclose their U.K. equity allocation will do nothing more than confirm what we already know, that pension funds generally have no bias to the U.K.,” Richard Parkin, head of retirement at BNY Mellon Investment Management, said in an emailed comment.

“More direct action will be needed to bring about any real change and drive greater U.K. investment. Of course, governments dictating investment policy introduces myriad issues, but given the cost of pension tax reliefs to the U.K. exchequer many would argue that the country should see a larger share of these investments,” Parkin said.

Hunt also confirmed that the government-owned British Business Bank will award a total of £250 million ($316 million) under the Long-Term Investment for Technology and Science initiative. The LIFTS initiative aims to create two new investment vehicles — which pension funds are also able to invest in — in order to support certain companies in the U.K. Under the LIFTS initiative, the British Business Bank chose Schroders Capital — the private markets unit of Schroders — to run £150 million in U.K. science and technology companies through a U.K. venture and growth long-term asset fund. The seed investment will be matched by savings and retirement firm Phoenix Group, London, Schroders said in a news release. Global alternatives manager ICG was also awarded £100 million by the British Business Bank to invest into U.K. life sciences companies under the initiative, with Phoenix also matching that investment, according to a news release by the BBB.

Read more @pionline