Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to paragraph 3.11 of the Autumn Budget 2024, published on 30 October 2024, what assessment she has made of the potential impact of investments by occupational pension schemes on the (a) place, (b) people and (c) net zero pillars of the growth mission.

The Government published the Interim Report of the Pensions Investment Review at Mansion House, which sets out proposals to reform the UK Pensions system. These reforms could unlock up to £80 billion in new productive investment including in businesses and infrastructure. Amongst other things this would help improve returns for savers and support the net-zero transition.

The proposed reforms to the defined contribution workplace pension market will accelerate consolidation, creating fewer, larger schemes. This will allow schemes to deliver better value, governance, and investment opportunities, through larger ‘mega-funds’ more able to undertake productive investment.

The Review also proposes reforms to the Local Government Pension Scheme (England and Wales) to tackle fragmentation and inefficiency. The LGPS manages £392 billion worth of assets, and the Interim Report proposes to require all 86 administering authorities to delegate investment management to pools. This will create large pools of professionally managed capital, in line with international best practice, and enhance the capacity and capability of the scheme to continue to drive national, regional and local investment.

The final Pensions Investment Review report, including the final proposals to be legislated for, will be published in the Spring ahead of the introduction of the Pension Schemes Bill.