PM Boris Johnson to meet pension and insurance bosses to thrash out plans to channel billions of pounds of retirement funds into ‘green’ projects
Boris Johnson will meet pension and insurance bosses in Downing Street next month to thrash out plans to channel billions of pounds of retirement funds into ‘green’ projects.
A source said there will be in-depth discussions about how pension cash can be diverted into initiatives such as installing solar panels in homes and providing charging points for electric cars.
More than £1trillion is sitting in defined contribution pensions – including workplace schemes. The Government is hoping to unlock more of this to invest in Britain’s green economy and ‘build back better’ initiative. Another £2trillion is in annuities and defined benefit schemes.
Summit: Boris Johnson will meet pension and insurance bosses in Downing Street next month
The agenda is expected to include more detail on funnelling pension money into various projects to reach ‘net zero carbon’ by 2050 – the commitment to reduce greenhouse gases to offset carbon emissions in order to combat climate change.
Sources said the trade body the Association of British Insurers is separately meeting with City Minister John Glen this week to talk over the new push.
One of the plans is to make homes – one of the largest emitters of greenhouse gas after travel – more reliant on green energy such as solar power. That project is estimated to cost about £250billion.
A source said: ‘This needs a scheme, and the Government is probably best placed to do it because you need a supply chain lined up including investment and the people to implement projects. There is a need to coordinate and get the right types of projects going.’
But the plans are expected to spark controversy as many of these investments are illiquid – meaning they are difficult to buy and sell – which could leave pension savers with some of their cash trapped in assets.
The debate over hard-to-sell investments came under the spotlight following the collapse of Neil Woodford’s fund after he poured billions of pounds into small, risky companies.
Andy Briggs, chief executive of Phoenix, the largest retirement company, said: ‘We need to pick up the pace if we’re going to hit net zero carbon by 2050.
‘We’re supportive of this initiative, and how pensions can invest whilst retaining strong customer protection. We will be mindful of the importance of maintaining returns.’