Millions of workers could see £6,000 boost to pension pots
Reforms in the Pension Schemes Bill propose that multi-employer defined contribution pension schemes and local government pension scheme pools operate at megafund level, managing at least £25 billion in assets within the next five years.
The Government plans to double the number of UK pension megafunds by 2030.
This could result in an investment of £50 billion in infrastructure projects, which the Treasury hopes will boost the economy and drive up higher returns for savers.
Since taking office we've delivered pay rises for over 3 million workers by increasing the National Minimum and Living Wage, and secured trade deals with key international partners.
Today I spoke to the unions about our ongoing commitment to working people. pic.twitter.com/aXjJomWMfA
Chancellor Rachel Reeves said: 'We're making pensions work for Britain. These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses – the plan for change in action.'
The Treasury said the schemes are expected to save £1 billion a year through economies of scale and improved investment strategies.
Under the reforms, the local government pension scheme will be consolidated, reducing the current 86 administering authorities into six pools.
Deputy Prime Minister Angela Rayner said: 'The untapped potential of the £392 billion local government pension scheme is enormous.
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'Through these reforms, we will make sure it drives growth and opportunities in communities across the country for years to come – delivering on our plan for change.'
Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock), described it as a 'truly a red letter day for pension schemes, their members and the companies who stand behind them'.
He said: 'The Government has clearly been bold in this area and this opens up the potential for this surplus money to be used more productively to benefit scheme members, firms and the wider economy.'
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