The news that investment companies have been added to the Pension Schemes Bill, following amendments from the House of Lords yesterday evening (28 April), has been mostly welcomed by industry experts.
Under the terms of the reviewed bill, pensions will be able to meet the government’s requirements to invest in private assets through investment trusts in sectors such as private equity or infrastructure.
Richard Stone, chief executive of the Association of Investment Companies (AIC), said: “Common sense has prevailed”.
The AIC has been pushing for the inclusion of investment companies in this bill since July 2025, when it wrote to Treasury Minister Torsten Bell to urge amendments.
“Investment companies are a proven structure for investing in private assets in the UK,” Stone continued. “It’s common sense that investment companies should be considered a legitimate way of accessing these assets.”
The amendments will give pensions schemes confidence that any investment in trusts will contribute to the Mansion House commitments, Stone said.
See also: Industry welcomes chancellor’s ‘regulatory easing’ in Mansion House reforms
Imran Razvi, senior policy adviser of pensions and institutional markets at the Investment Association, was similarly positive.
“The Pensions Scheme Bill is an important step in consolidating the UK’s pension system to help create sophisticated scale at UK pension schemes, improving their ability to deploy capital through enhanced scheme governance and investment processes.”
Claire Dwyer, head of investment companies at Fidelity International, described this as an “important” and “constructive” step for the UK.
“Giving pension schemes greater scope to invest through the [investment trust] structure should enhance choice, support member outcomes and add further breadth to the UK’s capital markets,” she said.
See also: Reigniting the relevance of investment trusts
The team at Peel Hunt agreed, with Anthony Leatham, head of investment companies research, describing this as a clear positive for investors and the sector.
While this may not result in an immediate increase in demand, it could raise incremental support and help narrow discounts, Leatham continued.
“If the legislation results in greater allocation to sectors such as private equity and infrastructure, investment companies provide an established, liquid route for pension schemes to access those assets,” he concluded.
Meanwhile, James Carthew, head of investment company research at QuotedData, noted it could lead to a significant change in how pensions invest.
“Why would a pension scheme invest in assets at asset value when it can secure a higher return for members by buying them at a discount,” he asked.
Nevertheless, while this was an important first step, some experts noted there is still more to be done.
For example, Louise Davey, head of policy and affairs at IGG, said the updated bill “still has clear remnants of mandation-led approach, which has no place in a healthy and fully functioning pension ecosystem”.
She was not the only expert to take note of this; Dr Yvonne Braun, director of long-term savings policy at ABI, added: “We remain concerned that the Bill includes a reserve power to mandate how pension funds invest.”
The UK government should focus on “enabling, not directing investment” if it wants to create better outcomes for savers and pensions, according to IGG’s Davey.
To encourage more domestic investment, there needs to be increased emphasis on projects that will support the UK economy, while delivering returns to savers, she concluded.
See also: AIC: Scale-up funding will ‘collapse’ without government intervention
