Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential merits of occupational pension scheme investment supporting economic growth.

I refer the member to the answer given to PQ UIN 34987 on 6 March 2025.

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, including sustainable infrastructure to help reach the Government’s net zero targets, and help improve returns for savers.

The proposed reforms to the defined contribution workplace pension market will accelerate consolidation, creating fewer, larger schemes, with a minimum scale requirement. 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, local and regional investment and will help to ensure investments are able to reach all corners of the nation.

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.

In addition to these reforms, the Government announced in January that it will pave the way for more well-funded DB pension schemes to share surplus funds with sponsoring employers and members, helping to drive growth by freeing up these funds for the benefit of the economy.