UKSIF: New Poll Shows Brits Want Pension Funds to Prioritise 'Best' Returns — Not Forced UK Investment
As the Pension Schemes Bill returns to the House of Lords with a 'reserve power' for mandated domestic investment, UKSIF's More in Common polling gives trustees important public sentiment data.
Context:
On 21 April 2026, UKSIF published the results of polling commissioned from More in Common, surveying over 2,000 British adults on their preferences for how pension funds, specifically Local Government Pension Scheme (LGPS) funds, should approach investment mandates. The publication is explicitly timed to coincide with the return of the Pension Schemes Bill to the House of Lords, which contains a 'reserve power' enabling the government to require certain pension schemes to invest a minimum portion of their assets in the UK.
The poll's headline finding: almost twice as many Britons favour LGPS funds prioritising the best returns for pension savers over mandated investment in the UK. Specifically, 40% said returns should be prioritised, 23% supported UK investment prioritisation, and 37% were undecided. Across party lines, even 34% of Conservative voters and 53% of Liberal Democrat voters backed return maximisation over mandated domestic allocation.
UKSIF's broader position articulated through its members managing over £19 trillion in assets, is that sustainable and ESG-aligned investment is not incompatible with best returns, but that coercive domestic investment mandates risk compromising both fiduciary duty and long-term pension adequacy. The poll is designed to provide trustees and policymakers with evidence that the public does not support returns-compromising domestic investment mandates.
Rules and Guidelines:
The legal and regulatory context is the Pension Schemes Bill currently before Parliament. The Bill includes a 'reserve power' that would allow the Secretary of State to direct pension schemes (particularly LGPS funds) to allocate a minimum proportion of assets to UK investments. This reserve power has been opposed by some pension trustees, investment managers, and legal advisers because it could conflict with fiduciary duty, which requires trustees to act in the best financial interests of beneficiaries.
Under current UK pensions law and FCA/TPR frameworks, pension trustees' primary fiduciary obligation is to maximise risk-adjusted returns for beneficiaries. While ESG factors and sustainability considerations are increasingly recognised as financially material (reflected in DWP regulations on stewardship and the FCA's Consumer Duty guidance for IGCs), mandating geographic allocation without financial justification would be a material departure from this framework.
UKSIF's polling is intended to challenge the political assumption that public opinion supports mandated domestic pension investment. It is also a strategic intervention: by demonstrating that Britons prioritise returns, UKSIF is providing ammunition for trustees and policy opponents to resist mandatory allocation while maintaining their ESG investment commitments on financial merit.
Businesses Affected:
LGPS funds, local authority pension committees, and pension fund trustees face direct exposure to any mandatory UK investment power under the Pension Schemes Bill.
Asset managers and investment consultants advising pension funds must navigate both fiduciary duty and any future statutory investment direction obligations.
ESG and sustainable finance practitioners should note that UKSIF is actively making the case that ESG investment is compatible with best returns, not a trade-off against them.
Legal advisers to pension trustees need to assess the fiduciary duty implications of any mandatory investment direction if the reserve power is exercised.
Next Steps:
Engage with the Pension Schemes Bill passage through the House of Lords. Trustees, investment committees, and sector bodies have an opportunity to submit evidence on the fiduciary duty implications of mandatory domestic investment powers.
Document your fiduciary duty framework. Where trustees are concerned about the reserve power, maintaining clear documentation of investment strategy rationale provides a legal foundation for challenging mandatory directions.
For ESG investment teams: use UKSIF's polling data and return evidence in investment committee papers and trustee communications to reinforce that sustainable investment is commercially motivated, not just values-driven.
Source | UKSIF | Pension Funds Returns
