UK Pension 'Megafunds' to Catalyze Economic Growth

The UK government plans to merge local pension funds into larger 'megafunds' to unlock billions for investment. This reform aims to boost economic growth and is broadly supported across political parties. Larger schemes are expected to offer greater economies of scale and investment opportunities.

In a significant move to bolster the UK's economy, Treasury chief Rachel Reeves announced plans to merge numerous pension funds into 'megafunds'. This landmark reform aims to unlock tens of billions for investment, potentially reviving economic growth severely impacted in recent years.

The planned merger will involve 86 local authority pension funds from England and Wales, taking cues from successful models in countries like Australia and Canada. The Local Government Pension Scheme is set to manage assets worth an estimated 500 billion pounds by 2030, marking this the largest pension upheaval in decades.

The reform has garnered broad political support, with the Labour government introducing necessary legislation next year. Business leaders cautiously approve the move but stress the need for concerted effort from the government to rebuild confidence in Britain's economic landscape.

(With inputs from agencies.)