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

Watch bungling robbers’ botched getaway as they drop loot & speed off with boot open… but cops STILL don’t catch them

THIS is the moment a cop flails his leg at a getaway car in a lame attempt to stop fleeing thieves. Police have been slammed for failing to catch burglars minutes after a raid as footage showed a cop kicking a vehicle as it sped off. It comes after masked robbers stole “thousands of dollars“ worth of power tools from a hardware store in Queensland, Australia.

The View bosses ‘desperately hunting for pro-Trump panelists’ after woke stars all backed loser Kamala

ABC News executives are reportedly actively searching for a conservative, pro-Trump voice to join the panel on The View after its woke stars all backed Vice President Kamala Harris for president. The talk show – co-hosted by liberals Whoopi Goldberg, Joy Behar, Sunny Hostin and Sara Haines as well as Republican Trump critics Ana Navarro and Alyssa Farah Griffin – featured the vice president in an episode just one month ahead of the election. Then, just one day after Trump’s victory, the panelists dressed in all black as if they were attending a funeral.

Saudi Arabia’s NEOM megaproject boss sacked after ‘threatening to BURY worker in desert’ in latest blow to $1tn scheme

THE highly controversial boss of Saudi Arabia’s pricey NEOM project has been sacked after allegedly threatening to bury a worker in the desert. Nadhmi Al-Nasr, head of the infamous Saudi mega scheme, has been heavily criticised in the past after allegations of abuse and an aggressive management style have all been revealed. The final blow to his reign came when a worker claimed he had been threatened by the chief.

Trump and Musk send MAGA world wild with powerful duet of God Bless America at Mar-a-Lago – with a glaring problem

Donald Trump and Elon Musk looked more like Simon and Garfunkel at Mar-a-Lago during a rendition of God Bless America – but fans spotted one minor problem. The duo returned to a hero’s welcome at the ‘Winter White House’ Wednesday night after Trump had a friendly chat with the Bidens in D.C. and joked he can’t get rid of his billionaire ‘first buddy.’ Conservatives were thrilled to see them alongside opera singer Chris Macchio for a rendition of the American classic.

‘UFOs are real’: Congress to hear Pentagon whistleblower’s bombshell testimony at major ‘alien’ hearing TODAY

A PENTAGON whistleblower who claims UFOs are real is set to present his bombshell testimony at a major “alien“ hearing today before the US Congress. Former counterintelligence officer Luis Elizondo, who is said to have investigated UFO cases while at the Department of Defence, claims America is in “possession of UAP technologies“. The former defence official will speak before The US House of Representatives Committee on Oversight and Accountability.

Furious woman whose daughter was ‘given detention for wearing a poppy pin on Remembrance Day’ blasts school’s punishment as ridiculous

A furious mother has claimed that her daughter was given a detention for wearing a poppy pin on Remembrance Day. The parent said she was angered that her child was punished for trying to commemorate and honour those who served and sacrificed in the war. As Britain came together to mark Armistice Day on November 11, the mother was shocked to receive a text from her youngster saying she had been handed a detention for wearing a poppy pin.

Leave a Reply

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