Merging local government pension schemes has the potential to release £200 billion to fortify the UK economy, researchers said before plans expected to be laid out this week by Rachel Reeves to revamp the industry.
Experts at the Pension Insurance Corporation, a specialist insurer, said that bringing the schemes together could unleash hundreds of billions of pounds of investment to upgrade UK infrastructure and strengthen economic growth.
Local government pension scheme assets total £392 billion but they are controlled by 86 small funds. “That fragmentation leads to excessive spending on fund managers and advisers and prevents large-scale investment in productive assets,” the Pension Insurance Corporation said.
Tracy Blackwell, its chief executive, said: “With this scale, the [local government pension scheme] pools could take on equity