Reeves Proposes Pension 'Megafunds' for Economic Growth

Chancellor Rachel Reeves has announced a significant reform of the UK's pension system, aiming to consolidate 86 local government pension schemes into larger 'megafunds' to unlock up to £80 billion for investment in infrastructure and businesses. This move, inspired by models in Canada and Australia, is intended to boost economic growth, improve pension returns, and drive investment in local economies. While welcomed by some, including the Centre for Policy Studies, there are concerns about potential risks to savers if the megafund strategy underperforms. Critics caution that the consolidation might overlook the needs of individual savers and use their funds primarily for governmental economic goals. Reeves' proposals are part of a broader economic strategy to stimulate private sector investment and foster partnerships globally. The reforms coincide with changes in National Insurance Contributions, which have been met with criticism from the hospitality sector over potential job losses.