UK leapfrogs Japan to second place in pension asset rankings
THE UK now outweighs Japan in terms of its pension fund assets, surging to become the world’s second largest market in 2013.
According to research released by Towers Watson yesterday, the UK market reached $3.263 trillion (£2 trillion) last year, while Japan was marginally behind with assets worth $3.236 trillion.
Back in 2003, Japan had more than twice the UK’s pension assets, with $2,906bn compared to only $1,261bn. In the last 10 years, UK pension assets have grown by about 11 per cent each year, against Japan’s one per cent.
According to the report, across the world, global institutional pension fund assets jumped by 9.5 per cent last year to $32 trillion.
The US still holds by far the largest share of the world’s pension market, with 59 per cent of assets accounted for. The UK and Japan each hold around ten per cent.
“During 2013 equities enjoyed their best calendar year of risk-adjusted return since the financial crisis and as a result pension funds in most markets are in the best shape they have been for many years,” said Carl Hess, the group’s global head of investment.
He added: “The global economic recovery continued to gain momentum throughout 2013, thanks to the absence of major negative events and a stream of positive economic news and after such a long period of financial retrenchment and uncertainty, this is all genuinely encouraging.”