Autumn Statement 2011: Government confirms pension funds to invest in infrastructure projects

Chancellor George Osborne has confirmed a set target of up to £20 billion of investment from British pension funds for infrastructure projects.

On 28 November, the government signed a memorandum of understanding with the National Association of Pension Funds (NAPF), the Pension Protection Fund (PPF), and a separate group representing pension schemes and infrastructure fund managers to support additional investments in UK infrastructure.

The government is also working with the Association of British Insurers to set up an Insurers’ Infrastructure Investment Forum.

Joanne Segars, chief executive of the NAPF, said: “We are keen to work with government to try to make it easier for pension funds to back big infrastructure.

“The UK desperately needs to update its infrastructure, and pension funds are hungry for stable, long-term, inflation-linked investments.

“The government hopes to unlock £20 billion, but the amount that comes from pension funds depends on the structure of the investment platform and the pricing of the assets.

“We are at a very early stage, and there are no plans or details on the table yet. We look forward to developing proposals with the Treasury over the coming months.”

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