UK insurers and pension companies held just 1.5% of UK quoted shares in 2024, the lowest proportion jointly held by them on record, ONS data has revealed.
The two sectors held a combined 45.7% of UK quoted shares in 1997, falling to 4.2% in 2022.
Insurance companies specifically held 0.9% of UK quoted shares in 2024, valued at £22.8bn, down from 1.7% in 2022 (£41.6bn).
David Brooks, head of policy at Broadstone, commented: “There has been a sustained and long-term structural shift of insurers and pension companies reducing their exposure to domestic equities. In part, this has been driven by pension schemes beginning to de-risk and shift their investment strategies from equities into bonds.
“Other factors such as the hunt for improved investment returns in other international markets and headwinds stemming from reforms to regulation, tax and accounting standards have also impacted appetite.
“Ultimately, the result is a growing disconnect between the UK’s long-term savings system and its public equity market. If pension and insurance assets continue to be deployed overseas, domestic savings inevitably do less to support the UK economy. “The Government’s productive finance agenda and reforms to London’s capital markets regime aim to make investment into UK equities more attractive but appear unlikely to reverse allocations to previous levels.”
