The UK Government has announced a plan to combine pension funds into larger “megafunds,” aiming to unlock around £80 billion for investment in businesses, infrastructure and local projects.
This initiative will involve merging Local Government Pension Scheme (LGPS) assets and other pensions into larger funds, with the goal of supporting economic growth, strengthening retirement savings, and enhancing local public services.
Chancellor Rachel Reeves outlined the approach, explaining that the changes are intended to support investment and economic expansion, as well as to improve the financial security of savers.
Following the recent Budget, Reeves described the reforms as part of a strategy to release funds for investment and help build the economy.
The reforms, expected to be introduced next year through a Pension Schemes Bill, will involve consolidating 86 separate LGPS funds into a smaller number of larger funds managed by professional fund managers.
Chancellor of the Exchequer, Rachel Reeves said: “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.”
