Rachel Reeves has unveiled a controversial new plan to boost large pension funds’ investment into private assets, in a move the Tories have claimed smacks of “desperation”. In a new “Mansion House accord”, these funds will be compelled to pump in up to £50bn if voluntary targets aren’t met, The Financial Times reports.

The Chancellor set out the Labour government’s new approach on Tuesday.

DON’T MISS

Powered by 

‘Dangerous’ Rachel Reeves pension plan ‘could put millions of retirement pots at risk’

Comments

Rachel Reeves gearing up for Dutch-style pensions takeover – everyone could be worse off

Comments

Alert to savers with defined contribution schemes over Donald Trump tariffs

Comments

Personal tax allowance increase to £20,000 update ‘in days’ in Commons showdown

Comments

Nigel Farage is entering dangerous territory – soon he’s going to have to pick a side

Comments

Millions ‘sleepwalking’ into retirement poverty, warns Scottish Widows

Comments

State pension age rise update as UK savers facing £10bn blow

Comments

Average five-year fixed-rate mortgage sees month-on-month jump

Comments

Pensions, drawdown pots and ISAs ROCKET as Trump slashes China tariffs

Comments

‘Rachel Reeves wants to hijack your pension’

Comments

UK pension payments could be slashed by 20% due to Donald Trump

Comments

Labour sent huge warning over risk of ‘falling further behind’ with key policy pledge

Comments

Tax rise warning as Rachel Reeves faces £57bn black hole

Comments

Pension warning as many Brits could be forced to delay retirement or go back to work

Comments

POLL: Do you trust Rachel Reeves with your pension?

Comments

Rachel Reeves takes huge £50bn gamble on growth – and she’s doing it with YOUR pension

Comments

Lloyds walks away from Reeves £50bn pensions deal

Comments

Rachel Reeves’ ‘short-sighted gamble’ is ‘serious threat’ to UK pensions

Comments

Rachel Reeves’ controversial new pension plan dealt massive blow by major bank

Comments

Rachel Reeves’ £50bn pension plans are ‘dangerous and misguided’

Comments

‘Dangerous’ Rachel Reeves pension plan ‘could put millions of retirement pots at risk’

Comments

Rachel Reeves gearing up for Dutch-style pensions takeover – everyone could be worse off

Comments

Alert to savers with defined contribution schemes over Donald Trump tariffs

Comments

Personal tax allowance increase to £20,000 update ‘in days’ in Commons showdown

Comments

Nigel Farage is entering dangerous territory – soon he’s going to have to pick a side

Comments

Millions ‘sleepwalking’ into retirement poverty, warns Scottish Widows

Comments

State pension age rise update as UK savers facing £10bn blow

Comments

Average five-year fixed-rate mortgage sees month-on-month jump

Comments

Pensions, drawdown pots and ISAs ROCKET as Trump slashes China tariffs

Comments

‘Rachel Reeves wants to hijack your pension’

Comments

UK pension payments could be slashed by 20% due to Donald Trump

Comments

Labour sent huge warning over risk of ‘falling further behind’ with key policy pledge

Comments

Tax rise warning as Rachel Reeves faces £57bn black hole

Comments

Pension warning as many Brits could be forced to delay retirement or go back to work

Comments

POLL: Do you trust Rachel Reeves with your pension?

Comments

Rachel Reeves takes huge £50bn gamble on growth – and she’s doing it with YOUR pension

Comments

Lloyds walks away from Reeves £50bn pensions deal

Comments

Rachel Reeves’ ‘short-sighted gamble’ is ‘serious threat’ to UK pensions

Comments

Rachel Reeves’ controversial new pension plan dealt massive blow by major bank

Comments

Rachel Reeves’ £50bn pension plans are ‘dangerous and misguided’

Comments

‘Dangerous’ Rachel Reeves pension plan ‘could put millions of retirement pots at risk’

Comments

Rachel Reeves gearing up for Dutch-style pensions takeover – everyone could be worse off

Comments

Alert to savers with defined contribution schemes over Donald Trump tariffs

Comments

Personal tax allowance increase to £20,000 update ‘in days’ in Commons showdown

Comments

Nigel Farage is entering dangerous territory – soon he’s going to have to pick a side

Comments

Millions ‘sleepwalking’ into retirement poverty, warns Scottish Widows

Comments

State pension age rise update as UK savers facing £10bn blow

Comments

Treasury officials told the FT that if the accord doesn’t deliver the desired result, Ms Reeves will legislate to give ministers a “backstop” to mandate a higher level of investment.

It comes as the bosses of 17 pension funds giants struck a deal with the Government, which ministers claim could release £25billion directly into the UK economy by the end of the decade.

At least half of these investments have been earmarked for UK assets including clean energy projects and startups, The Guardian reports.

Signatories will allocate at least 10% of the funds into defined contributions to private markets within the next five years, of which a minimum of 5% will be allocated to the UK, if supply of suitable assets allows, as per Sky News.

The new accord markedly expands commitments made under Jeremy Hunt, Ms Reeves’ predecessor as Chancellor in the previous Conservative government, known as the Mansion House compact.

Signatories of the deal in 2023 agreed to put aside up to 5% of funds for investment private assets by the end of the decade, though they didn’t have to be UK, The Guardian.

The Treasury told the FT that the new accord’s progress would be monitored, with the initiative “reinforced by measures to be announced in the upcoming final report of the pensions investment review”.

An official at the Government department said: “We are confident the market is moving in the right direction and we won’t have to use mandation at this stage,” but added that “it’s an important backstop”.

Tory Shadow chancellor Mel Stride claimed the idea smacked of “desperation”, telling the FT: “Pension funds must be free to make investment decisions based on what’s best for savers.”

Ms Reeves said: “I welcome this bold step by some of our biggest pension funds, which will unlock billions for major infrastructure, clean energy and exciting start-ups — delivering growth, boosting pension pots and giving working people greater security in retirement.”

Pensions minister Torsten Bell said: “Pensions matter hugely, they underpin not just the retirements we all look forward to, but the investment our future prosperity depends on.

He also welcomed the “pensions industry decision to invest in more productive assets, from growing companies to infrastructure”, adding: “This supports better outcomes for savers and faster growth for Britain.”