Reeves to lay out pensions overhaul in Mansion House speech

Rachel Reeves will reportedly propose an overhaul of Britain’s pension fund industry in her first Mansion House speech as the government tries to unlock billions of pounds worth of investment.

The Chancellor’s plans for pension reform will be one of three key messages she intends to deliver in her maiden speech to the UK’s financial and professional services industry, The Sunday Times reported.

The annual address, scheduled for 14 November, is often used by the current Chancellor to hint at the government’s plans for the economy, City and regulation.

Reeves’ other main topics are said to be Labour’s plans to get “inactive” workers into jobs and strengthen the government’s new industrial strategy.

The speech comes after Labour’s first Budget in 14 years last week, which sparked a selloff in UK government bonds in response to plans for £41bn per year in tax rises and £142bn in extra borrowing over the next five years.

Reeves is looking to pension reform in Labour’s push for economic growth, with the potential to plough billions into infrastructure investment and London’s stock market.

She is understood to be attracted to the Canadian model and met with leaders from the country’s largest pension funds in August.

A Canadian style of reform would see Britain’s local authority pension schemes, together worth around £400bn, merge into a single fund.

City grandees have called for a shake-up in Britain’s risk culture as the proportion of UK pensions allocated to domestic equities has tumbled in recent decades. Corporate defined-benefit schemes, with some £225bn of surpluses, have instead leaned more on bonds.

Some large retirement schemes are concerned that Reeves could mandate UK funds to invest in specific asset classes like British stocks or infrastructure, potentially forcing them to buy lower-quality assets. The government has so far not supported mandation.

A Treasury spokesperson commented: “Following this week’s budget to fix the foundations of the UK economy, the Chancellor is focused on growth.

“Central to that are the next steps on pension reform, which will be set out in her Mansion House speech. This will unlock more private investment to fuel the government’s growth mission.”