According to the plans, the chancellor stated that billions of pounds of investment could be unlocked in the UK economy from defined contribution (DC) schemes alone, potentially boosting pension pots for savers in these schemes by over £11,000.
The review will also explore how to tap into the investment potential of the £360 billion Local Government Pensions Scheme (LGPS), which manages the savings of workers delivering essential local services, and address the £2 billion spent on fees.
This announcement precedes the inaugural Growth Mission Board meeting on Tuesday (23 July), which will be chaired by the chancellor and aims to drive the government’s efforts to achieve the highest sustained growth in the G7.
The chancellor’s announcement marks the initial phase of a review focused on investment, led by Emma Reynolds, the first joint minister for pensions from the Treasury and the Department for Work and Pensions (DWP). The initial stage of the review is expected to report within the “next few months.”
The subsequent phase, starting later this year, will consider additional measures to improve pension outcomes and increase investment in UK markets, including evaluating retirement adequacy.
The chancellor and the pensions minister will host a roundtable with the pensions industry today (22 July) to initiate extensive industry engagement for the review.
Reeves stated: “Despite inheriting a very challenging situation, this new government is committed to fulfilling our mandate to grow the economy and improve the well-being of every part of our country.
“The review we are announcing is the latest in a series of significant reforms to unlock growth, increase investment, and enhance savings for pensioners. We cannot afford to waste any time. That is why I am dedicated to strengthening the foundations of our economy so we can rebuild Britain and enhance people’s lives.”