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What new investment opportunities mean for your Nest pension

A few weeks ago on the 10th July the Chancellor announced new plans to increase pension returns for savers, by encouraging more pension schemes to invest in a different type of way.

We want to discuss with you what was announced by the Chancellor and why Nest is involved, as it will directly affect you and your pension.

For the past few years, the government has been discussing how to encourage more investment in the UK, and ways to boost pension savings.

The outcome is that nine pension schemes, including Nest, have signed a voluntary agreement to invest more in ‘unlisted equities’ deals. The Chancellor believes that these types of deals could help secure the best possible outcome for pension savers, and we agree.

So what are unlisted equities deals, and why are we investing your money into them?

In short, unlisted equity is a term relating to a specific way you can invest –buying a stake in companies or assets that you can’t access via the usual way for example a stock exchange. Instead, you have to do it directly and negotiate with the company or owner of the asset what rate of return you are willing to accept for investing. Nest’s scale £30 billion and counting will help ensure you get access to quality investment opportunities.

To help prepare our members for retirement, we invest your money into things which should grow in value as you’re saving with us. That’s the ultimate goal. Pensions are long-term savings, so we're focused on investments that grow in value for decades to come.

Unlisted companies fit that description nicely. You typically remain invested for a long time and in the process can benefit from a higher rate of return, in part because you’re committing your money for longer periods.

Nest has already seen and understood the powerful role these types of deals can play in boosting your pension pots. They have historically performed very well, above and beyond equivalent types of investments you can access through a stock exchange.

They are also commonplace in workplace pensions in countries like Australia or America. It was a key driver behind Nest setting up the means to invest in unlisted equity deals, to ensure our members aren’t missing out.

Nest will continue to increase our investment in these types of deals. We already have around £2 billion invested in unlisted equities, and we’ll continue to build upon this in the coming years.

Published 28 July 2023