Reform of the Local Government Pension Scheme (LGPS) could unlock £40bn of investment for infrastructure, an insurance company has estimated.
On Monday (July 22) chancellor Rachel Reeves (pictured) launched a review into private pensions ‘to boost investment, increase pension pots and tackle waste in the pensions system’.
The Pension Insurance Corporation (PIC), a specialist insurer of defined benefit pension schemes, argues that consolidating LGPS schemes into a single fund would ‘give Britain a real sovereign wealth fund’.
Amalgamating the 86 English council schemes, which manage £400bn of assets, would free up £40bn for investment in infrastructure such as green energy, electricity grids and transport networks, according to PIC.
PIC’s CEO, Tracy Blackwell, a member of the British Infrastructure Council which advised Labour in opposition on investment policy, said: ‘A single LGPS with a sophisticated, long-term investment strategy might put up to £40bn into vital infrastructure.
‘That could make a big difference to the UK’s economic prospects. This shows that with the right approach to purposeful investment, pension assets can deliver huge economic and social value to Britain.’
This article first appeared on localgov.co.uk.
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