Industry experts have welcomed the inclusion of the National Wealth Fund Bill in the King's Speech, suggesting that the new plans should help provide pension schemes with a viable vehicle to invest in "exciting growth areas".

The government announced plans to establish a National Wealth Fund that aims to boost growth and unlock investment in the UK earlier this month (July), also forming a National Wealth Fund Taskforce to begin this work.

In particular, the fund will look to simplify the UK’s "fragmented" landscape of support for businesses and investors, by aligning institutions like the UK Infrastructure Bank and British Business Bank and help mobilise private capital in the "industries of the future".

A National Wealth Fund Bill was also included in yesterday's (17 July) King's Speech, alongside a new Pension Schemes Bill.

In its briefing notes, the government explained that whilst work on the fund has already begun, the bill will put this on a permanent statutory footing.

The government also confirmed that, to ensure investments can start immediately, the National Wealth Fund will deploy funding through the UK Infrastructure Bank, expanding its remit and providing an additional £7.3bn to catalyse private investment at an even greater scale, aiming to generate £3 of private sector investment for every £1 it invests.

The inclusion of the National Wealth Fund Bill was welcomed by industry experts, with Pensions and Lifetime Savings Association (PLSA) director of policy and advocacy, Nigel Peaple, suggesting that the new plans should help to provide pension schemes with a viable vehicle to invest in exciting growth areas.

Green Finance Institute CEO and National Wealth Fund Taskforce chair, Dr Rhian-Mari Thomas, also highlighted the prioritisation of the National Wealth Fund as demonstration of the government’s determination to provide private investors with the confidence needed to invest in technologies and infrastructure that will drive growth and create jobs.

“Implementing the recommendations made by the taskforce will drive investment into priority areas, accelerate the decarbonisation of our economy and position the UK for increased international investment,” Thomas added.

Indeed, Hymans Roberston head of pensions policy innovation, Calum Cooper, also said that it is clear that the government wants pensions, and the National Wealth Fund bill, to play a role in providing meaningful stimulus to UK productivity.

And whilst he acknowledged that the pensions industry will need clarity for this, calling for both a practical road map and clear and attractive opportunities to invest at scale, he suggested that this bill could play an "important part in stimulating this thinking and direction".

"There is a huge societal opportunity in unlocking the productive potential of our £2.5trn of pensions," he added.

Adding to this, Aegon head of pensions, Kate Smith, said: "We also welcome the National Wealth Fund Bill, and look forward to seeing more detail on both this and the Pensions Schemes Bill going forward.”

The inclusion of the National Wealth Fund Bill has also been welcomed more broadly, as Investment Association CEO, Chris Cummings, highlighted the enshrinement of the fund in legislation as a “clear signal from the government of their intent to mobilise much needed capital for green investments”.

“The Climate Change Committee estimates that an additional £50-£60bn of capital investment will be required every year over the next decade to deliver the UK’s net-zero ambitions, and there is an urgent need to build the pipeline of investable infrastructure projects in the UK to support this,” he stated.

“We strongly support this ambition to channel much needed capital into British businesses and infrastructure projects to cement the UK as a leader in sustainable finance."

British Business Bank CEO, Louis Taylor, also welcomed the inclusion of the bill, noting that key institutions, including the British Business Bank and the UK Infrastructure Bank, will become aligned under the new National Wealth Fund to invest in the new industries of the future, supporting the government’s new industrial strategy.

“We expect the National Wealth Fund to create a single coherent governmental offer for businesses and a compelling proposition for investors that will help mobilise billions more in private investment in line with a lot of our recent work, enabling us to catalyse external institutional capital, including pension fund investment, into UK high potential companies, by leveraging the British Business Bank’s scale, networks, and track record,” Taylor added.

“Yet time is of the essence. We need the government to maintain the momentum that has characterised the work of the taskforce to date so that capital is deployed at pace.”

Some organisations had also highlighted the plans for a National Wealth Fund as a promising area in the run up to the election, with Brightwell CEO, Morten Nilsson, urging Labour to continue to work closely with the industry on the National Wealth Fund to ensure it is set up for success.

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