UK Chancellor to Establish Retirement 'Mega Funds' to Strengthen the Economy

UK Finance Minister Rachel Reeves has announced plans to establish a series of "mega funds" with new investment power of up to £80 billion ($102 billion) as part of what is described as the biggest shake-up in pensions seen in decades.

Reeves is under pressure to address the significant lack of investment by UK pension funds in domestic assets, which has been highlighted by the recent collapse in allocations, cited as one of the reasons for the country's lackluster economic growth. She stated that she would consolidate around 60 defined contribution pension schemes and 86 Local Government Pension Schemes to make them large enough to finance more cost-effective and ambitious projects. "Last month's budget has solidified the foundations to restore economic stability and put our public services on a firmer footing. Now, we are moving towards growth," she said.

In her statement, Reeves added, "This will open the door to billions of pounds of investment in business and infrastructure, boost people's pension savings, and support economic growth, allowing us to improve the situation for all parts of Britain, starting with the biggest reforms to the pension market in decades."