14:30 Laura Trott (Conservative)

Good investments are central to a well run pension scheme, and decisions made by trustees have a significant impact on growing savers’ pots. Adding performance-based fees to the list of charges that fall outside the regulatory charge cap is intended to make it easier for schemes to access new investment opportunities, such as the infrastructure needed for the transition to net zero. The Government believe that professionally managed investments in those assets, known as illiquids, are well suited to pension savers, given their long-term investment horizons and potential to provide members with higher net returns.

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14:34 Matt Rodda (Labour)

The dashboard is clearly an important aspect of pensions policy, and we support it. We understand why the Government are proposing these changes, but I have a series of questions about the specifics of the charge cap and related matters. I will also say a brief word in support of illiquid investments, which are hugely beneficial to the country in terms of the transition to net zero in the future. I visited a solar farm with the former pensions Minister, the hon. Member for Hexham (Guy Opperman), and I put on the record my thanks to him for the cross-party way in which he worked with me on the issue.

I support greater illiquid investment, but to what extent have the Minister and her colleagues considered the interests of savers in this change? Clearly, higher charges have an impact on pension savers. I am also interested in what the Government are doing in other aspects of pensions policy to encourage greater illiquid investments, whether in green energy infrastructure or other matters that come under the same heading. There may well be a range of other policy levers that could be used to encourage this type of investment.

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14:39 Laura Trott (Conservative)

Green energy infrastructure is exactly what we are trying to promote as part of the illiquids reform. To be clear, I do not think that will be the be-all and end-all of trying to get more investment in illiquids, but it will take us a large degree further forwards. Again, I am grateful for the cross-party support for moving in this direction. Not only is it important for the UK economy as a whole but, from my perspective most important, it is in the interests of pension savers.

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