The economic footprint of the Pension Protection Fund

Frontier Economics has conducted a study into the economic footprint of the Pension Protection Fund’s (PPF) equity investments in the UK. 

The PPF protects the pensions of those who participate in defined benefit schemes: if their sponsoring employer becomes insolvent the PPF steps in. 
 
As part of its role the PPF manages a portfolio of more than £30bn of assets that underpin the retirement incomes of nearly 300,000 members. More than £2bn of the PPF’s portfolio is invested in equity financing in the UK, providing crucial ‘productive finance’ across the UK economy. 
 
Frontier’s study looked at the overall economic footprint of these investments and found that:

  • The overall economic footprint of the companies, assets, and infrastructure that the PPF invests in is equal to £28.6bn or around 1.5% of the UK economy.
  • More than 325,000 jobs and £5.7bn in corporate and employee taxes are associated with the PPF’s investments.
  • The footprint is wide-ranging across the UK and makes particularly large contributions to local and regional economies outside London.
  • Manufacturing, construction, and infrastructure investments comprise most of the footprint, reflecting the fact that investments include major projects such as Thames Tideway and the Riverside Energy from Waste (EfW) plant.

The study can be found here.