We are going further and faster to kick start economic growth so we can put more money in people’s pockets.https://t.co/9zNY2pSzGH
— Rachel Reeves (@RachelReevesMP) January 28, 2025
The UK government has proposed changes to pension fund rules, aiming to unlock £160 billion in surplus funds for businesses to invest in the economy. Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer met with CEOs of major companies to discuss plans to reduce red tape and stimulate growth. Under the new policy, companies will be able to use excess funds from their pension schemes to support investment in operations and growth initiatives.
This move is expected to provide financial flexibility to businesses and contribute to a more dynamic economy. Reeves emphasized her commitment to removing obstacles to growth, including regulatory and planning process barriers.
Labour's number one mission is to secure growth, drive higher living standards for everyone and get more money into people's pockets.
Changes announced by @RachelReevesMP today will tear down the barriers to growth and unlock billions of investment.https://t.co/TcvBh8e46l
— Preet Kaur Gill MP (@PreetKGillMP) January 28, 2025
She is set to unveil a plan to revitalize construction and housing projects near train stations and endorse proposals for airport expansions.
Lots I disagree with Labour on, but these #Pension reforms build on 2023 Mansion House speech & previous DB consultations.
The devil is in the detail: but this continues progress on superfunds, & a 3rd way for schemes between run on & buy out 1/ https://t.co/piZFD4ujyp
— Guy Opperman (@GuyOpperman) January 28, 2025
Unlocking pension surplus for growth
In a speech to the Parliamentary Labour Party, Reeves stressed the need for swift action to alleviate cost-of-living pressures and achieve economic growth. She challenged colleagues to embrace reforms and deregulation efforts.
However, the policy change has raised concerns among pension experts and unions who worry about the long-term security of retirees’ funds. The government has assured that stringent regulatory measures will be in place to monitor how companies use pension scheme surpluses. Officials acknowledge that failure to grow the economy and improve living standards before the next general election could jeopardize Labour’s majority.
The UK economy reported a modest 0.1 percent growth in November, highlighting the urgency of the government’s economic agenda. Reeves concluded by urging a shift from a mindset of refusal to one of proactive growth, stating that the government must start saying “yes” to drive the economy forward.
