Give pension savers the opportunity to invest in the development of new medicines and a greener economy

The BioIndustry Association (BIA) has called on the UK Government to improve transparency in the pensions industry so that savers can make informed decisions on what their money is invested in.

The trade association says transparency will help ensure pension savers have access to diversified investment strategies benefiting from the wealth-creating opportunities of the UK’s innovative, venture capital-backed industries, including biotech and life sciences, while supporting issues the public care about, like better healthcare and a cleaner environment.

The comments were made in the BIA’s response to the Department of Work and Pensions consultation on facilitating investments in illiquid assets.

The BIA recommends:

• Pension savers should have the opportunity to gain exposure to sectors that will benefit their own and others’ health and deliver real asset value growth for their savings to provide a comfortable income in retirement
• Provide greater transparency for savers to know what their money is supporting, making it necessary for pension providers to explain if their strategy includes investing in venture capital-backed industries like biotech and life sciences, and to disclose the proportion of their investments that are targeted at such industries
• For the Government to renew efforts and momentum to change the Defined Contributions (DC) regulatory charge cap, which is discouraging pension funds from investing in venture capital
   

Steve Bates OBE, Chief Executive of the BioIndustry Association, said: “Biotechnology is transforming the world we live in, from better healthcare to products that are kinder on the environment, and UK researchers and companies are leading the world in this exciting new era of innovation. Yet UK pension schemes, especially those operating in the defined contributions market, are not investing in innovative life science and biotech companies, meaning UK pension savers are not benefitting from the UK’s competitive strengths.

“Greater transparency will enable UK pension savers to see exactly what their state mandated investment is in. We want schemes to provide a high level of granularity in the classifications used. If a catch all of “illiquid assets” is allowed savers won’t know if their investment is supporting the buy-out of House of Fraser or a spin-out from the University of Manchester developing a cure for childhood leukaemia. This is no big step as Australian pension schemes already report each assets identity to their investors. Greater transparency will enable informed consumer choice to drive greater UK private sector investment into UK life science companies as strong growth opportunities.

“The UK has two world-leading sectors: life sciences and finance. A symbiosis should exist between these two, but it doesn’t, yet. There is great opportunity to turbo-charge the UK’s life sciences and biotech sector and capture more of its economic value for the UK, including in the form of retirement savings, by building better connections between our financial institutions and innovative sectors of our economy.”

ENDS

Notes to Editors

1. For more information please contact Jack Fellows, Communications and Media Manager on [email protected] or 07825942934