Reuters – Britain’s new Personal Accounts scheme, a plan for savers without a company pension, is "highly unlikely" to invest in hedge funds and private equity, said the head of the authority in charge of setting up the scheme.

The investment portfolio of the Personal Accounts scheme, which is set to grow to 150 billion pounds ($279 billion) in 50 years’ time, has not been decided, although the scheme has said its default fund is likely to consist mainly of index-tracking funds.

Tim Jones, chief executive of the Personal Accounts Delivery Authority (PADA), told Reuters on the sidelines of an industry conference: "My personal view is that it highly unlikely because that’s not where our low to middle income earners are."

Hedge funds, which have been blamed for adding to current market volatility due to their role in short-selling stocks, are viewed by pension funds as a diversifier, although returns have been disappointing for many investors this year.

Jones also said the scheme is likely to offer around a dozen funds for savers to select from.

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