The Chancellor, Rachel Reeves, has confirmed her consideration of plans to consolidate local government pension schemes in order to utilize their £360bn of resources for investments in the economy. Reeves has expressed interest in emulating Canada’s approach of using pension funds to heavily invest in infrastructure projects to foster growth. This announcement follows the recent revelation by the media that the Chancellor will be meeting with a group of Canadian retirement funds during her three-day trip to North America this week.
Currently, local government pensions in England and Wales are divided into 86 individual funds, with approximately six million members. In light of this, Reeves stated, “The size of Canadian pension schemes means they can invest far more in productive assets like vital infrastructure than ours do.” She went on to express her desire for British pension schemes to adopt the Canadian model and contribute to the stimulation of the UK economy, resulting in better returns for savers and unlocking billions of pounds of investment. Reeves added, “We’re already beginning to see schemes announce plans to invest. That’s a vote of confidence in our work to fix the foundations of the economy, rebuild Britain, and make every part of our country better off.”
In other news, shops have been urged to close early over riot fears, house prices have risen by more than expected, and an airline’s environmental ad has been banned. As previously announced, Reeves has launched a review into the pensions sector, and the drive for economic growth was a key message in the King’s Speech. The Chancellor is expected to provide further details on her pension plans in her first Mansion House address. Investment firms, including Legal & General, Aviva, and Phoenix, have welcomed the industry review since its launch in July.
