£3.9tn on tap yet the UK faces a £150bn investment gap by 2030

The City of London Corporation says the UK investment gap 2030 stands at about £150 billion, despite the country being home to a £3.9 trillion pool of capital. New measures already in motion could mobilise £35 billion, leaving a shortfall of about £115 billion if policy and markets do not do more to channel money into growth.

Two interventions are highlighted. A government-backed investment hub aims to attract £10 billion in international capital by 2030, including £7.7 billion from sovereign wealth funds. The Mansion House Accord seeks to unlock £25 billion from pension funds by encouraging a 10% allocation to private markets such as infrastructure and high-growth companies.

Scale-up businesses contribute £1.4 trillion to the UK economy and employ more than 3.2 million people, yet the analysis says they need £15 billion a year to reach their potential. Seven in ten report difficulty accessing suitable finance. On infrastructure, annual investment needs to rise by £5 billion year on year to meet a government target of £80 billion by 2030.

The report also points to underused long-term savings. UK defined contribution pension funds hold £298 billion in assets but allocate about 8% to domestic equities and roughly 2% to growth assets such as scale-ups, below international peers. By comparison, Canadian pensions allocate 34% to growth assets and Australian superannuation funds allocate 23% to domestic equities, according to the analysis.

To close the UK investment gap 2030, the City Corporation calls for a credible pipeline of investible projects in digital, energy and transport, regulatory reform so annuity providers can back infrastructure, and a stronger focus on co-investment in growth sectors.

Chris Hayward, Policy Chairman of the City of London Corporation, said the UK has “the capital, talent and institutions to lead,” but warned that without a clear channel for investment “we risk failing to close the £115 billion investment gap by 2030… the cost of inaction is measured not just in missed opportunities, but in lower productivity and slower growth.”

Readers can find the full analysis and methodology here.

The question now is how quickly public and private capital can be aligned so that promising companies and critical infrastructure do not stall for lack of finance. The UK investment gap 2030 is a target, not a certainty, but only if policy, markets and investors pull in the same direction.

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[Image Credit | Getty Images]

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