UK Government Unveils Pension Fund Reforms

UK Chancellor Rachel Reeves has unveiled plans to reform pension funds to stimulate domestic investment, following a disappointing economic growth figure of just 0.1%. The strategy includes consolidating local government pension schemes into larger 'megafunds' to enhance investment in UK infrastructure and businesses. Currently, only 4.4% of UK pensions are allocated to domestic equities, significantly lower than the global average of 10.1%. While the government is not mandating investments in UK assets yet, pensions minister Emma Reynolds has indicated that such measures could be considered if voluntary reforms fail to yield results. The reforms aim to pool assets of at least £25 billion and potentially unlock £80 billion for investment. The government is focused on driving better returns through fewer, larger, and more efficiently managed pension funds.