Reform of the Local Government Pension Scheme (LGPS) could unlock £40bn of investment for infrastructure, an insurance company has estimated.
Chancellor Rachel Reeves on Monday (July 22) 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.’
Check out: Rising Trends: Local authority pension fund investment
