{"id":443867,"date":"2026-02-25T00:33:10","date_gmt":"2026-02-25T00:33:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/443867\/"},"modified":"2026-02-25T00:33:10","modified_gmt":"2026-02-25T00:33:10","slug":"reform-uk-plans-to-use-500bn-of-council-pension-assets-to-invest-in-british-businesses","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/443867\/","title":{"rendered":"Reform UK plans to use \u00a3500bn of council pension assets to invest in British businesses"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

A Reform UK government would consolidate local council pension schemes into a near-\u00a3500bn \u201csovereign wealth fund\u201d that it claims would boost economic growth by investing in British businesses.<\/p>\n

Reform deputy leader Richard Tice said it would be one of the top eight largest funds in the world and could generate an annual surplus of between \u00a320bn and \u00a330bn a year.<\/p>\n

\u201cIt will have a strategic British growth mandate,\u201d he said, as he accused the existing local government pension scheme of being \u201cdisparate, uncoordinated\u201d and having \u201cno vision\u201d. \u201cThis is such a huge opportunity, it\u2019s an absolute game-changer.\u201d<\/p>\n

The LGPS in England and Wales has about \u00a3402bn in assets, with Scotland and Northern Ireland having another \u00a378bn at the end of March last year.<\/p>\n

The scheme is split across 98 administering authorities in the UK, 86 of which are in England and Wales. These 86 are in the process of merging their assets after the Labour government announced last year that all of their assets must be in one of six \u201cpools\u201d by this April.\u00a0Council funds in England and Wales have 17 per cent of their assets invested in the UK at present.\u00a0<\/p>\n

Tice<\/a> gave the example of British Steel as a business the fund could invest in, helping to refurbish its blast furnaces.<\/p>\n

Tice used his press conference on Tuesday \u2014 his first as spokesperson for business, energy and trade \u2014 to announce that a Reform government would repeal all net zero targets, zero-emissions vehicle mandates, employment rights and property rental rules introduced by the current Labour government. He also announced that Reform would introduce \u201cheavy tariffs\u201d on Chinese cars.<\/p>\n

As part of the pension plans, Reform said that new workers joining the LGPS would be offered a defined contribution pension, with the defined benefit element to be closed to new members. The pensions of existing council fund members would be unaffected.\u00a0<\/p>\n

Tice said this would enable councils to cut existing employer contributions to about 10 per cent, \u201csaving councils millions and millions every year\u201d. The average employer contribution in the LGPS is about 21 per cent of pay.\u00a0<\/p>\n

Recommended<\/p>\n

\"Montage<\/a><\/p>\n

The announcement echoes a similar proposal made by the Tony Blair Institute in 2023, which advocated consolidating the UK\u2019s \u201cfragmented\u201d pensions landscape into a so-called superfund to drive investment in British infrastructure and industry.\u00a0<\/p>\n

Tice said the scheme was underperforming \u201chugely\u201d by \u201c\u00a38bn to \u00a310bn per year\u201d. But pensions experts were sceptical that Reform\u2019s proposals would necessarily deliver better returns by focusing more on UK investments, pointing to the scheme\u2019s average annualised returns over the past decade of more than 7 per cent. \u201cThis is not a free lunch,\u201d said Sir Steve Webb, a former pensions minister and now a partner at consultancy LCP. \u201cIf this turns out to generate lower returns\u2009.\u2009.\u2009.\u2009council taxes would have to go up.\u201d\u00a0<\/p>\n

Increasing the fund\u2019s allocation to equities could also make the performance more volatile, leading to bigger changes in the level of contribution rates that are set every three years.<\/p>\n

Webb added that the impact of putting new joiners into a defined contribution scheme would be \u201can incredibly slow burn\u201d.\u00a0<\/p>\n

John Ralfe, an independent pensions consultant, said that LGPS \u201ccannot become a SWF, whatever Reform may think\u201d because it had made promises to pay pensions to its members.<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":443868,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":["post-443867","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/443867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=443867"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/443867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/443868"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=443867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=443867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=443867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}