What the numbers say: U.K. Finance Minister Jeremy Hunt said that the government reached an agreement with nine of the nation's largest pension providers to allocate 5% of their assets to early-stage startups in the country by 2030. Aviva, Legal & General Group, and M&G are a few of the pension funds that have inked the agreement. If other pension funds follow suit, the initiative could unlock up to £50B ($64B) in funding for startups, per Hunt. Why it matters: The new investment strategy could boost pensioners' annual returns by an additional £1,000 ($1,283). If more pension schemes invest in VC, the average pensions could increase by 12%. Among European nations, the U.K. has the largest pension market worth over £2.5T ($3.2T).
Relevance: The move comes amidst growing criticism over U.K.'s regulatory policies, which are driving away startups and tech companies. Notably, chip design firm Arm chose to list in the U.S. rather than the U.K. Furthermore, the poor economic conditions and Brexit caused a sharp 70% YoY drop in VC funding for U.K. startups in Q1 2023. |
