‘Dangerous’ Rachel Reeves pension plan ‘could put millions at risk’ | Personal Finance | Finance

Speculation that Rachel Reeves plans a radical shake-up of pension fund investment has come under fire from leading voices in finance and politics.

It has been reported that major pension providers will be expected to allocate up to 10% of savers’ funds into unlisted assets by 2030 — with at least half of that invested in UK projects.

While the proposal is voluntary, concerns are growing that legislation could follow for non-compliant firms.

Nigel Green, CEO of the deVere Group, one of the world’s largest independent financial advisory firms, warned that the move could threaten the long-term security of millions of retirement pots and undermine trust in the system.

Mr Green said: “This is a dangerous and misguided policy for retirees. The purpose of a pension fund is to grow wealth for savers over the long term. That means investing wherever the most compelling returns are likely to be found, and not according to government diktats designed to patch over domestic political pressures.”

Mel Stride, the shadow chancellor, echoed the alarm, accusing Reeves of jeopardising people’s retirement security for short-term political gain.

“Rachel Reeves wants to use your pension pot to bail her out of her own economic failings,” Mr Stride said.

“The Chancellor is threatening to use legislative pressure to force funds into domestic equities, regardless of risk or return. That’s not leadership – it’s desperation.”

Green also warned that forcing pension funds into a fixed UK allocation could lead to lower returns and increased risks for retirees.

“Forcing pension funds to tilt portfolios toward one geography regardless of market conditions could distort asset allocation, reduce diversification and expose millions of future retirees to lower performance,” he said.

“It’s not the job of pension managers to carry the weight of industrial policy.”

Critics argue the move sets a dangerous precedent, with private savings at risk of being politicised.

“There’s a clear line between encouraging investment and forcing it,” Green warned. “Crossing that line sends the wrong signal to global markets. It also opens the door to future governments feeling entitled to dictate terms on how private savings are deployed.”

Mr Green pointed out that if UK markets were not attracting capital organically, the solution lies in improving performance — not coercion.

He warned that such interference risks eroding the fundamental purpose of pension saving.

“People expect their pension contributions to be professionally managed in their best interests — not treated as a national piggy bank,” he said.

“This risks creating deep scepticism among savers who are already facing significant pressures planning for retirement.”

With hundreds of billions of pounds held in UK pension schemes, the sector is one of the country’s most powerful financial engines — but Green says that power must be protected, not politicised.

“Strong, independent pension funds are a cornerstone of long-term financial security,” he concluded.

“Undermining that strength weakens the whole savings system. It would be a short-sighted gamble that comes at the expense of those who’ve spent decades preparing for retirement.”

Ministers argue the reform will unlock capital for infrastructure and help revitalise the UK’s sluggish growth.

The Treasury has acknowledged concerns regarding encouraging pension funds to allocate a greater portion of their investments into UK-based assets. Officials have emphasised that any future actions will be carefully evaluated to ensure they align with the best interests of savers and the broader financial system.