Changes to pension caps and investment rules could lead to an extra £5.26bn investment into UK science and technology each year.
Plans to exclude performance fees from workplace pension caps and recently launched changes to pension investment rules would unlock huge investment into new jobs and economic growth, according to a joint venture between Bruntwood and Legal & General.
The findings, from the Market Spotlight report published by Bruntwood SciTech, showed that the combined impact of the long-term asset fund, which was launched in October last year, and the potential relaxing of fee limits, which is being considered by the government, could lead to £3.19bn of investment into the UK’s science and technology sector by 2025.
By 2030, that figure will have reached £5.26bn annually.
The study added that this investment boom would have a large impact on regional economies in the UK.
It said this could lead to investment into science and technology businesses in the north of England and the Midlands totalling £818mn per year by 2050, including £330mn in the north west, compared with £810mn in London.
Of the 8,900 jobs the report says could be created over the next three years, 1,200 of them would be in the North West, compared with 1,700 in London.
By 2030, 25 per cent of all jobs created would be in the north of England, compared with 17 per cent in the capital.
Chris Oglesby, executive chair at Bruntwood SciTech, said the study provides “powerful evidence” of further pension investment reform as a way of rapidly accelerating domestic private equity and venture capital activity in the science and technology industries.
“Today, around 80 per cent of investment into UK tech and life sciences comes from overseas, largely institutional sources and especially from North America and Asia,” he said, adding that much of this investment goes to London.
“While global money is increasingly finding a home in the regions, boosting domestic investment is the fastest possible route to levelling up our knowledge economy.”
Oglesby added that a private investment boom dovetails with the government’s own efforts to address regional imbalances.
“With additional investment into the digital, transport and skills infrastructure of our places, especially regional cities, we can increase their capacity to absorb this new wave of private capital and cascade its benefits to their surrounding towns and neighbours.”
The research was conducted by Development Economics on behalf of Bruntwood SciTech – a joint venture between Legal & General and regional property company, Bruntwood.