The UK will struggle to deliver the strongest growth in the G7 unless it reforms the institutions that connect domestic savings with British businesses, MPs have warned.
A new report from the House of Commons Business and Trade Committee argues that Britain has no shortage of capital, but too little of it reaches the companies trying to grow. The Committee points to £3 trillion in pension assets, £610 billion in cash savings, at least £264 billion of undeployed investment capital and one of the world’s largest financial centres.
Despite that, it says 380,000 UK businesses that want finance cannot access it.
The report describes this as an investment paradox. The UK has deep capital markets, a large pensions sector, strong universities and a substantial venture capital industry, but many growing businesses still struggle to secure the finance they need. The Committee argues that this has contributed to promising companies selling early, moving abroad or failing to reach their full commercial potential in the UK.
Liam Byrne MP, Chair of the Business and Trade Committee, said: “Britain is not short of money. We are short of institutions capable of putting that money to work.
“We have £3 trillion in pension assets, £264 billion of undeployed investment capital, £610 billion sitting in cash savings accounts and one of the world’s great financial centres.
“Yet 380,000 businesses that want finance cannot get it.”
Scale-up finance under pressure
The Committee says the UK would need to mobilise an additional £180–200 billion of investment each year to match the investment rate of the strongest performing G7 economy.
For the fintech sector, the findings touch on a long-running concern: Britain remains a strong place to start a company, but scaling that business to maturity can be harder. Many UK fintechs depend on successive funding rounds, access to specialist investors and the ability to reach international markets before they become profitable at scale.
The report suggests that the UK’s investment institutions have failed to connect savers, pension funds and investors with domestic enterprise at the required level. It says decades of policy decisions have left Britain with a system that exports capital while growth companies struggle to find long-term backing at home.
The Committee also highlights weakness in the UK’s public markets. It says the Alternative Investment Market has lost more than 1,000 companies since 2007, while 94% of UK scale-ups are acquired before reaching maturity, with around half bought by overseas buyers.
That concern has become more prominent as policymakers look for ways to encourage companies to list and remain in London. Recent Mansion House reforms have already put more pressure on pension funds to invest in UK assets, but the Committee argues that further action will be needed if Britain wants to build larger domestic companies.
Pension capital and UK listings
The report recommends measures to encourage pension funds to invest more in UK equities, scale-ups and productive assets. It also calls for stronger support for companies that list in the UK and stay on the London Stock Exchange.
Peter Briffett, CEO and co-founder of Stream, the UK-headquartered workplace finance platform formerly known as Wagestream, said the report reflects a funding challenge for companies that have moved beyond the start-up stage and are seeking to scale from the UK.
Stream works with more than 2,000 business customers across the UK, US and Europe, including Asda, Next, Co-op, Fortnum & Mason, the NHS, Bupa and Hilton Hotels. The company has raised $228 million from investors including Sofina, Ascension Ventures, Balderton, Northzone, Smash Capital, LocalGlobe Latitude, the British Business Bank and Better Society Capital.
“Today’s report shines a light on the barriers businesses face when accessing capital and scale in the UK,” Briffett said.
“As a social impact business with listing ambitions, the reality is Britain is a great place to found a company, but often not to scale one to listing size. While there has been recent progress, the Committee rightly recognises that more is needed to drive British pension investment here, or risk promising UK companies losing faith in Britain as a destination for the long term.”
Innovation figures add to concern
The Committee’s findings land alongside separate data showing a decline in the share of UK businesses classed as innovation-active.
According to figures from the UK Innovation Survey 2025, highlighted by the National Centre for Universities and Business, 34% of UK businesses were innovation-active in 2022–24. That compares with 53% a decade earlier.
The NCUB said the decline raises concerns about business innovation and future competitiveness, particularly at a time when productivity and investment remain under pressure.
Rosalind Gill, Director of Policy at NCUB, said innovation depends on more than research strength alone.
“The UK has many strengths. We continue to produce world-class research, generate promising discoveries and collaborate effectively across institutions,” Gill said.
“Innovation is not created by research alone, however. It depends on businesses investing in R&D and innovation, shaping demand, adopting new technologies and working with the research base to solve real-world challenges.”
Gill said business leaders continue to call for clearer long-term priorities, stronger routes from research to market and greater confidence that the UK can support firms from start-up through to scale.
Public finance and private capital
The Business and Trade Committee also examines the role of institutions such as the British Business Bank, the National Wealth Fund, Innovate UK and UK Export Finance.
It says those organisations have grown in importance, but businesses still face a difficult system when trying to find the right form of support. The report calls for better coordination between public finance bodies, procurement, research and development support, regulation and industrial strategy.
For fintech companies, that could affect access to growth finance, export support and public-sector demand. Many firms in payments, regtech, open banking, data infrastructure and workplace finance operate in markets where adoption depends not only on capital, but also on regulation, procurement and trust from larger institutions.
The Committee also argues that the Government should make better use of public procurement to help growth businesses build revenue. It says public contracts can help companies prove demand, attract follow-on investment and move beyond the early-stage funding gap.
Reform pressure grows
The Government is expected to respond to the Committee’s recommendations within two months.
The response will show which parts of the report ministers intend to take forward, including proposals on pension investment, business finance, public finance institutions, procurement, UK listings and support for companies seeking growth capital.
For fintech and other UK scale-ups, the next test will be whether those reforms lead to more domestic capital becoming available beyond the early funding stage.
