{"id":160241,"date":"2025-06-05T12:51:09","date_gmt":"2025-06-05T12:51:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/160241\/"},"modified":"2025-06-05T12:51:09","modified_gmt":"2025-06-05T12:51:09","slug":"rachel-reeves-to-shake-up-pensions-to-boost-uk-investment","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/160241\/","title":{"rendered":"Rachel Reeves to shake up pensions to boost UK investment"},"content":{"rendered":"<p>\t\t\tThursday 05 June 2025 8:03 am<br \/>\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n<p>\t\t\tThursday 05 June 2025 10:33 am\n\t<\/p>\n<p>\t\t\tShare<\/p>\n<ul>\n<li class=\"social-share__popup-item\">\n<p>\t\t\t\t\t\tFacebook\t\t\t\t\t\tShare on Facebook\n\t\t\t\t<\/li>\n<li class=\"social-share__popup-item\">\n<p>\t\t\t\t\t\tX\t\t\t\t\t\tShare on Twitter\n\t\t\t\t<\/li>\n<li class=\"social-share__popup-item\">\n<p>\t\t\t\t\t\tLinkedIn\t\t\t\t\t\tShare on LinkedIn\n\t\t\t\t<\/li>\n<li class=\"social-share__popup-item\">\n<p>\t\t\t\t\t\tWhatsApp\t\t\t\t\t\tShare on WhatsApp\n\t\t\t\t<\/li>\n<li class=\"social-share__popup-item\">\n<p>\t\t\t\t\t\tEmail\t\t\t\t\t\tShare on Email\n\t\t\t\t<\/li>\n<\/ul>\n<p><img width=\"742\" height=\"495\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/GettyImages-2214550145-e1748952658297.jpg\" class=\"media \" alt=\"\" fetchpriority=\"high\" loading=\"eager\" decoding=\"sync\"\/>\t\tRachel Reeves has been pushing pensions reform since Labour came into power. Photo by Darren Staples \u2013 WPA Pool\/Getty Images)\t<\/p>\n<p>The government is set to shake up <a href=\"https:\/\/www.cityam.com\/people-and-organizations\/pensions\/\" target=\"_blank\" rel=\"noopener\">UK pensions<\/a> today, with Rachel Reeves planning several government-backed megafunds to boost pension wealth and investment.\u00a0<\/p>\n<p>In the most significant reform to the pensions system since 2021, the bill will focus on six areas \u2013 from giving the government <a href=\"https:\/\/www.cityam.com\/rachel-reeves-to-set-binding-pensions-allocations-in-megafunds-launch\/\" target=\"_blank\" rel=\"noopener\">a \u201creserve\u201d power to force pension schemes to invest in the UK<\/a> to a new mechanism for merging smaller, defined pots.\u00a0<\/p>\n<p>Ministers estimate that workers will, on average, be boosted by \u00a31,000.\u00a0<\/p>\n<p>Trimming away of red tape and business administration is thought to offer up a \u00a3225m annual saving for companies.\u00a0<\/p>\n<p>Work and pensions secretary Liz Kendall has said that the new rules are aimed at \u201csecuring better value for savers\u2019 pensions and driving long-term investment in British businesses to boost economic growth in our country\u201d.\u00a0<\/p>\n<p>These new measures are intended to help consolidate the more than 13m pots containing less than \u00a31,000, many of which cropped up as a result of the Cameron government\u2019s 2012 introduction of auto-enrolment.\u00a0<\/p>\n<p>Lisa Picardo, chief business officer UK at pensions fintech PensionBee said: \u201cThis reform has been a long time coming and should mark the start of a wider shift towards a more modern, joined-up pensions system.\u201d<\/p>\n<p>Elsewhere, rules around \u201cpension freedoms\u201d \u2013 introduced by then-Chancellor George Osborne in 2015 to allow early withdrawal of funds \u2013 will be adjusted to require defined contribution schemes to lay out clear default options.\u00a0<\/p>\n<p>The bill is set to put in place a new system to boost transparency around pension scheme performance to make good on plans for a \u201cvalue for money\u201d framework. <\/p>\n<p>\t\t\t\t\t\t<a href=\"https:\/\/youtube.com\/watch?v=http:\/\/uuU1xh2frBU\" class=\"lty-playbtn\" title=\"Play Video\" target=\"_blank\" rel=\"noopener\"><br \/>\n\t\t\t\t\t\t\tPlay Video<br \/>\n\t\t\t\t\t\t<\/a><\/p>\n<p><a href=\"https:\/\/linktr.ee\/boardroomuncovered\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Subscribe to the Boardroom Uncovered podcast from City AM here.<\/strong><\/a><\/p>\n<p>Pension schemes caught in a bind\u00a0<\/p>\n<p>In a trail of legislation last month, the Chancellor announced that the government would be setting \u201cbinding asset allocation targets\u201d to urge investment into UK infrastructure and businesses.\u00a0<\/p>\n<p>\t\t\t\t\tRead more<\/p>\n<p>\t\t\t<a class=\"read-more__link\" href=\"https:\/\/www.cityam.com\/rachel-reeves-to-set-binding-pensions-allocations-in-megafunds-launch\/\" target=\"_blank\" rel=\"noopener\">Rachel Reeves to set \u2018binding\u2019 pensions allocations in megafunds launch<\/a><\/p>\n<p>Reeves faces a delicate balance between intervening to boost pension performance and forcing the hand of UK funds, with <a href=\"https:\/\/www.cityam.com\/dont-force-pension-funds-to-buy-british-aviva-chief-warns-ministers\/\" target=\"_blank\" rel=\"noopener\">Aviva boss Dame Amanda Blanc warning that mandating pension funds to buy British is like \u201ca sledgehammer to crack a nut\u201d<\/a>.\u00a0<\/p>\n<p>The announcement follows a City AM report in May that <a href=\"https:\/\/www.cityam.com\/public-trust-in-pensions-declines-for-the-first-time-in-five-years\/\" target=\"_blank\" rel=\"noopener\">public trust in pensions had dipped for the first time in five years<\/a>, according to research by Trafalgar House.\u00a0<\/p>\n<p>The People\u2019s Pension, the largest commercial master trust in the UK, described the bill as a \u201cpivotal moment\u201d, which will shape a brighter future for both savers and the industry: <\/p>\n<p>\u201cThis is a pivotal moment in pension reform. The bill contains many measures that will require providers to deliver better outcomes for savers and improve the workplace pension system. We are encouraged by the introduction of default consolidator schemes, which will be the most effective way to solve the dormant small pots problem. <\/p>\n<p>\u201cWe\u2019re also very pleased to see the inclusion of value for money metrics within the bill as it is vital that savers better understand the real value that is offered by different providers,\u201d said Patrick Heath-Lay, chief executive of People\u2019s Partnership, provider of People\u2019s Pension.<\/p>\n<p>Meanwhile, The Pensions Regulator (TPR) described the bill as a \u201conce in a generation\u201d opportunity.<\/p>\n<p>Nausicaa Delfas, chief executive of TPR, said: \u201cThe Pension Schemes Bill is a once in a generation opportunity to address unfinished business in the UK pension system.<\/p>\n<p>\u201cMaking sure all schemes are focused on delivering value for money, helping to stop small, and often forgotten pension pots forming, and guiding savers towards the right retirement products for them, will mean savers benefit from a system fit for the future.<\/p>\n<p>\u201cWe have long advocated for fewer, larger well-run schemes with the size and skill to deliver better outcomes for savers. As such we are also pleased to see the proposed legislative framework for DB superfunds, providing options and choice in defined benefit consolidation.\u201d<\/p>\n<p>\t\t\t\t\tRead more<\/p>\n<p>\t\t\t<a class=\"read-more__link\" href=\"https:\/\/www.cityam.com\/what-is-clearly-missing-from-rachel-reeves-pension-review\/\" target=\"_blank\" rel=\"noopener\">What is \u2018clearly missing\u2019 from Rachel Reeves\u2019 pension review<\/a><\/p>\n<p>\t\tSimilarly tagged content: <\/p>\n<p>\t\t\tSections\t\t<\/p>\n<p>\t\t\tCategories\t\t<\/p>\n<p>\t\t\tPeople &amp; Organisations\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"Thursday 05 June 2025 8:03 am \u00a0|\u00a0\u00a0Updated:\u00a0 Thursday 05 June 2025 10:33 am Share Facebook Share on Facebook&hellip;\n","protected":false},"author":2,"featured_media":160242,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-160241","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114630851633298650","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/160241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=160241"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/160241\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/160242"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=160241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=160241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=160241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}