Make pension tax relief only available to savers prepared to invest in UK, Andy Haldane says

Andy Haldane, president of the British Chambers of Commerce, has proposed restricting the UK’s £50bn pension tax relief system to savers who invest in British businesses, arguing that three decades of unfettered free markets have failed to channel capital into domestic companies. Speaking at the BCC’s annual conference in London, Haldane said the government extends more than £50bn in pension tax relief and more than £10bn in tax relief for ISAs without any requirement that the funds support UK firms [1]. The BCC is the national representative body for 53 chambers of commerce across the UK, collectively representing 50,000 businesses that employ six million people [2]. “Unfettered free markets have not worked. That is a lesson of the last 30 years,” Haldane told delegates [1]. Haldane, a former Bank of England chief economist, described the British pension system as the only one in the world that lacks a home bias in investment [1]. He asked whether a third way existed that could “shift the balance of incentives towards British businesses, while leaving those choices in the hands of asset managers and their owners” [1]. His answer was to attach conditions to pension tax relief, which is currently granted at savers’ marginal rate of tax, with higher-rate taxpayers at 40% and additional-rate taxpayers at 45% receiving the largest benefit [1]. Chambers of commerce, such as those represented by the BCC, are local business networks that advocate for the interests of member firms [3]. The London Chamber of Commerce and Industry, founded in 1882, provides support services and runs interest groups including the Asian Business Association and Black Business Association [4]. Haldane’s proposal is designed to address a funding gap that he says hampers the growth of small- and medium-sized enterprises [1]. He cited surveys showing that 70% of households would like their savings to be invested in UK firms [1]. The chancellor, Rachel Reeves, had previously suggested forcing pension schemes to devote a proportion of their funds to UK investments but pulled back from mandating the measure in the Pension Schemes Act 2026 after City firms lobbied against a “mandation clause” during the consultation period [1]. Haldane offered no detailed blueprint for the new tax rules, which could take years to negotiate with the pensions industry [1].