News

Rachel Reeves to unveil ‘big bang’ on British economy with biggest pension reform in decades which could unlock up to £80 billion worth of investment

Rachel Reeves will today unveil a major pensions shake-up designed to unlock up to £80 billion of investment in British infrastructure and business.

In her Mansion House speech tonight, the Chancellor will confirm she is pressing ahead with plans to merge pension schemes to create new ‘megafunds’ capable of investing in major infrastructure projects and emerging industries.

Ms Reeves will argue that the move could unlock a wave of private sector investment that will boost her anaemic growth forecasts and ultimately provide better returns for pensioners.

The Chancellor will use tonight’s speech in the City of London to try and set out a positive vision for growth, following last month’s high-tax Budget, which has rattled some employers.

Pledging to ‘go for growth’, she will say she has ‘never been more optimistic about our economic potential’.

In a thinly-veiled warning to Donald Trump, she will also make the case for free trade, arguing that protectionist tariffs of the sort planned by the president-elect would harm the global economy.

The source said evidence from countries like Canada and Australia suggested bigger schemes could deliver high returns by investing in projects like road and rail rather than tying up cash in government bonds.

New Treasury analysis to be published this week will show that big funds with assets of £25 to £50 billion could provide far more productive investment in a wider range of assets.

Ms Reeves will say: ‘Last month’s Budget fixed the foundations to restore economic stability and put our public services on a firmer footing. Now we’re going for growth.

‘That starts with the biggest set of reforms to the pensions market in decades to unlock tens of billions of pounds of investment in business and infrastructure, boost people’s savings in retirement and drive economic growth so we can make every part of Britain better off.’

In the biggest pension reform for decades, the existing 86 local authority pension schemes, which control assets worth almost £500 billion, will be required to consolidate their assets in a ‘handful of megafunds’.

Ministers will also legislate to create a minimum size for private sector defined benefit schemes, forcing the merger of some schemes, which between them manage almost £800 billion of assets.

The Treasury said the resulting megafunds would have to meet ‘rigorous standards to ensure they deliver for savers’.

Local authority schemes are also expected to have to invest at least 5 per cent of their assets in the local economy.

The plans, which were originally discussed by the last Conservative government, are now a key plank of Labour’s growth agenda, which took a knock last month when the Office for Budget Responsibility downgraded its forecasts for the later years of this decade following the Budget.

The proposals were welcomed by some in the pensions industry last night.

Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association, said the plans were a ‘positive step towards ensuring our system delivers the best value for money for savers’.

She added: ‘Larger pension schemes can help achieve better outcomes for savers through economies of scale, stronger governance, negotiating power and additional resources.’

But the Chancellor is facing a backlash from some local authority schemes.

In a response to a government consultation is September, the Local Government Pension Scheme Advisory Board warned that some members wanted to maintain local accountability and were concerned that they could be forced to break their duty to provide best value for pensioners if they were required to follow government investment rules.

The body acknowledged the existing structure was ‘not ideal’ but added: ‘Forced merger or consolidation should be avoided at all costs, as it is highly unlikely to lead to better outcomes.’

Related Posts

The reason behind Brad Pitt’s shock ‘collapse’ and ‘immediate medical evaluation’ at Vegas Grand Prix is revealed

Onlookers were shocked and concerned after A-List actor Brad Pitt ‘fainted’ at the Las Vegas Grand Prix this weekend – but all was not as it seemed. On Saturday, ahead of the highly-anticipated on-track showdown in Sin City, the star, 60, was seen collapsing to the ground as he ‘fainted’ on the grid. He wobbled on his feet several times before crashing down on to a padded mat held by a crew member.

NHS alert after a surge in hospital admissions linked to bad reactions to weight-loss jabs amid concerns over sale of ‘miracle’ treatment online

The number of hospital admissions for bad reactions to weight-loss drugs is more than four times higher than previously thought – with a staggering 274 cases reported on top of nearly 15,000 said to have suffered ill effects. Last month, the medicines regulator said there had been 68 UK hospitalisations associated with ‘miracle’ weight-loss jabs such as Ozempic, used to treat obesity and diabetes. But now it has emerged that the figure is far higher at 274, while the number of adverse reactions linked to the drugs has reached an astonishing 14,996, according to the Medicines and Healthcare products Regulatory Agency (MHRA) – more than double the 7,228 reactions reported last month.

Conor McGregor vows ‘big actions are coming’ and says he is ‘soon to be vindicated’ as he launches furious tirade against his rape accuser Nikita Hand after she won €250,000 from him in court

Conor McGregor has warned ‘big actions are coming’ and he is ‘soon to be vindicated’ during a series of social media tirades against a decision to award his rape accuser nearly €250,000. McGregor, 36, was found by a jury in a civil court to have 𝑠e𝑥ually assaulted Nikita Hand, 35, at a hotel in south Dublin in December 2018. After deliberating for six hours and 10 minutes, a jury of eight women and four men returned their verdict on Friday afternoon, awarding Ms Hand the substantial damages for her claim.

Bombshell new clue may finally crack DB Cooper case 53 years after hijacker escaped out of plane with $200k

The parachute that the infamous hijacker DB Cooper used to make his getaway out of a plane with $200,000 may have finally been found. The enigma behind DB Cooper, the man who jumped out of Northwest Orient Airlines Flight 305 with thousands in cash after handing a stewardess a note demanding the ransom, has long stumped the FBI. Nearly a decade later, the FBI has begun unofficially looking back into the case after the children of Richard Floyd McCoy II contacted YouTuber Dan Gryder in 2020 with possible evidence.

‘Never-Trump’ columnist ridiculed for calling Trump’s Cabinet ‘1,000 shades of white’

Washington Post columnist Jennifer Rubin is being ridiculed for calling Donald Trump’s cabinet nominations ‘1,000 shades of white’. Rubin, 62, a former conservative commentator at the Jeff Bezos-owned paper, now largely advocates for Democrats and on her podcast, ‘Jen Rubin’s Green Room.’ Speaking on MSNBC Rubin did not hold back as she ripped Trump’s nominations over the color of their skin.

Matt Gaetz is mercilessly mocked over surprising new career move: ‘Not on my bingo card’

Former Attorney General pick Matt Gaetz has turned his eyes towards a new career after claiming he was forced to exit Congress due to a 𝑠e𝑥 ‘smear’ campaign. Gaetz, sensationally dropped out of contention two days ago amid a sleuth of allegations including having 𝑠e𝑥 with a minor girl and and illicit drug use – which he has always denied. He also withdrew himself from Congress for next year despite having been re-elected to the seat he vacated.

Leave a Reply

Your email address will not be published. Required fields are marked *