Govt must address US-dominated flows from UK pensions

It claims the money is being funnelled into the seven US tech giants which account for 22.4 per cent of the global index.

Ashok Gupta, director of New Capital Consensus, said: “UK savers want to see their money improving the areas they will most likely retire in, but this just isn’t happening.

“If the new administration wants to get to grips with regional development and get our economy growing again, it must address both US-dominated overseas flows and unproductive secondary trading.”

Gupta said this can be achieved partly through tax disincentives.

The think-tank proposes including a 10 per cent DC exit tax on accumulated gains for funds that do not maintain a 30 per cent allocation to the UK.

It also suggests dividend tax relief for funds that hold at least 10 per cent in “UK regional productive assets”.

Gupta added: “The system requires multiple redesign principles that perform in concert, including rethinking benchmark construction, changing how funds are automatically invested by default, and greater transparency over how and where our pensions are invested.”