{"id":169861,"date":"2025-06-09T09:11:10","date_gmt":"2025-06-09T09:11:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/169861\/"},"modified":"2025-06-09T09:11:10","modified_gmt":"2025-06-09T09:11:10","slug":"reeves-doing-one-thing-no-politician-should-ever-do-with-your-pension-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/169861\/","title":{"rendered":"Reeves doing one thing no politician should EVER do with your pension | Personal Finance | Finance"},"content":{"rendered":"

Rachel Reeves is rewriting the rules of the pension system. No Chancellor has ever dared go this far.<\/p>\n

She wants to tell the people managing our defined contribution workplace pensions, where to invest our retirement pots. Tens of millions have these plans. It\u2019s an extraordinary power grab.<\/p>\n

Under her plan, smaller workplace pension schemes will be forced to merge into so-called \u201cmegafunds\u201d, each with at least \u00a325billion in assets.<\/p>\n

Reeves claims her plan could boost the average worker\u2019s pension by \u00a36,000<\/a>. Sounds great. And yes, there are upsides to building large, efficient pension schemes.<\/p>\n

Economies of scale could cut costs. Members might get access to better-performing investments. But there\u2019s a catch, and it\u2019s a big one.<\/p>\n

First, that \u00a36,000 figure is highly questionable. No credible investment professional would promise a future return like that.<\/p>\n

While there are savings, there will also be added costs. And in the real world, returns depend on markets, not ministers.<\/p>\n

Reeves isn\u2019t stopping there.<\/p>\n

In most workplace schemes, much of the money sits in \u201cdefault funds\u201d. That\u2019s the standard option when savers don\u2019t choose where to invest.<\/p>\n

Reeves wants her new pension megafunds to funnel this money into the UK economy. And if pension managers don\u2019t comply, she\u2019ll take legal powers to force it through.<\/p>\n

For now, she says those powers won\u2019t be used. But the fact they\u2019re even on the table marks a shift into dangerous, uncharted territory.<\/p>\n

UK markets have lagged badly in recent years. Pension managers have voted with their feet and gone global, particularly to the booming US.<\/p>\n

Forcing money back into underperforming UK assets could give us a bit more growth, so I can see why Reeves is tempted. But it might also drag down returns and make pensioners poorer.<\/p>\n

There\u2019s another problem. It also risks tying your savings to Labour\u2019s political goals.<\/p>\n

The job of a pension fund is simple: grow members\u2019 money. Not prop up the British economy. Or keep politicians in power.<\/p>\n

That principle is now under threat.<\/p>\n

Now comes the really scary bit.<\/p>\n

Reeves isn\u2019t just setting the framework, she\u2019s picking favourites.<\/p>\n

She\u2019s named the sectors she wants your money to go into: infrastructure, clean energy and the fast-growing businesses of the future.<\/p>\n

She even claimed her reforms will bring \u201cbetter returns for workers\u201d. Only someone who doesn’t know much about investing would dare claim that.<\/p>\n

Clean energy is volatile and has slumped in recent years. UK infrastructure projects always take twice as long and cost twice as much as planned.<\/p>\n

High-growth firms are, by definition, high-risk. Private equity is expensive, illiquid and boom-and-bust.<\/p>\n

These investments don\u2019t come cheap either. Pension managers will have to charge higher fees to manage them, which will come straight out of your pot.<\/p>\n

Remember, this is a woman who had her credit card taken away from her<\/a>. Now she wants to decide where your pension is invested.<\/p>\n

Reeves is desperate to get the economy growing, but she’s barging in where she doesn’t belong. There’s a reason why no Chancellor has gone this far before. Because no Chancellor should.<\/p>\n","protected":false},"excerpt":{"rendered":"Rachel Reeves is rewriting the rules of the pension system. No Chancellor has ever dared go this far.…\n","protected":false},"author":2,"featured_media":169862,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,6615,70840,2074,70838,2499,619,16,70839,15],"class_list":{"0":"post-169861","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-investing","11":"tag-investment-risks","12":"tag-pension","13":"tag-pension-reforms","14":"tag-personal-finance","15":"tag-rachel-reeves","16":"tag-uk","17":"tag-uk-infrastructure","18":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114652635799445366","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/169861","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=169861"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/169861\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/169862"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=169861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=169861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=169861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}