Pension industry backs Reeves’ £160bn investment drive

The pensions industry supports Rachel Reeves’ £160bn corporate surplus plan, provided retirees receive appropriate government protection. (Source City AM)

Reeves and Starmer will meet City leaders to discuss pension reforms, unlocking surplus funds for investment and increasing trustee flexibility. Rising interest rates have strengthened UK defined benefit schemes, pushing 75% into surplus, where assets exceed liabilities.

The Treasury estimates £160bn remains locked by investment rules, restricting funds from businesses and the economy.

Starmer said the plans will “unlock billions of investment.” Pension leaders cautiously support the reforms, emphasizing the need for proper safeguards.

Zoe Alexander of PLSA noted that easing surplus return rules could encourage trustees to adopt bolder, higher-risk investment strategies.

Jonathan Lipkin of the Investment Association stated that, with proper safeguards, the proposals could boost economic investment, increase risk-taking, and enhance pension benefits.

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