Chancellor Reeves: Pension funds can fire up the UK economy

The Chancellor Rachel Reeves has called on pension funds to “learn lessons from the Canadian model and fire up the UK economy”.

The Chancellor will host a roundtable with the so-called ‘Maple 8' group of Canadian retirement funds in Toronto today Wednesday 7 August, who have invested billions of pounds in the UK economy in recent years.

She will urge the funds to continue backing Britain and take home lessons about how consolidation of pension schemes into larger funds can help drive investment in productive assets such as vital infrastructure and high-growth businesses.

The meeting is part of intensive industry engagement for the landmark review of pension fund investment announced last month to boost investment in the UK and deliver higher returns for people's pension pots.

Also on the Chancellor's agenda to deliver more investment and finance growth is the financial services sector, with Rachel Reeves today confirming her first Mansion House address will set out how she will work in partnership with industry and regulators to deliver growth. This will include delivering the stability the sector needs to grow, the support it needs to invest across the UK and reforms it needs to remain at the cutting-edge of new innovations and technologies.

Chancellor of the Exchequer Rachel Reeves said:

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

“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.

“We're already beginning to see schemes announce plans to invest. That's a vote of confidence in our work to fix the foundations of the economy, rebuild Britain and make every part of our country better off.”

Industry strongly welcomed the announcement of the pension fund investment review, with supportive comments made by groups such as Legal & General, the BVCA, Aviva, Barclays and Phoenix.

New investment vehicles have since been announced to channel pension fund money into infrastructure and the UK's fastest growing companies. Last week Phoenix and Schroders launched their Future Growth Capital co-investment fund, which will invest up to £20 billion in the UK over the next decade.

Channelling more pension fund money will release investment demand and comes alongside measures to unlock supply through fixing the broken planning system, setting up a National Wealth Fund and the biggest overhaul of listings rules for the UK stock exchange.