Rachel Reeves plots new pension scheme to unlock £360bn boost | Personal Finance | Finance

The Government is mulling over the idea of merging local government pension schemes to pool their £360billion resources, following a model similar to Canada’s. Chancellor Rachel Reeves will be meeting with representatives from the so-called Maple Eight group of Canadian retirement funds in Toronto this Wednesday.

These funds, including the Ontario Teachers’ Pension Plan and the Canada Pension Plan, are notable infrastructure investors, and Ms Reeves believes UK schemes could learn a lot from them.

The local government pension scheme in England and Wales is currently divided into 86 separate funds, serving around six million members.

Ms Reeves stated: “The size of Canadian pension schemes means they can invest far more in productive assets like vital infrastructure than ours do.”

She added: “I want British schemes to learn lessons from the Canadian model and fire up the UK economy, which would deliver better returns for savers and unlock billions of pounds of investment.”

She also noted that some schemes have already announced plans to invest, calling it a vote of confidence in the Government’s efforts to strengthen the economy and improve conditions across the country.

Ms Reeves has previously declared her intention to review the sector, aiming to find ways to increase investment in the UK and provide higher returns for people’s pension pots.

In her inaugural Mansion House address, she will outline how the sector can collaborate with regulators to grow and potentially consolidate.

Investment giants such as Legal & General, Aviva and Phoenix have expressed their support for the industry review announced in July.

Just last week, Phoenix and Schroders unveiled their Future Growth Capital co-investment fund, which aims to inject up to £20billion into the UK over the next ten years.