Changes Coming to British Pensions...?!?

The government wants to make some changes to to the rules surrounding the management of our £2 trillion pensions market....

Needless to say this is an astronomical amount of money, so it's certainly a target worth considering.

Nothing is set in stone yet but the government wants to make it easier for individuals who have lots of little workplace pensions to move them all into one fund, which should help to reduce fees paid on each individual fund. Initial estimates show this could mean the average pension is worth £11K more over a lifetime, although this is relatively small change I guess.

The biggest single pot the government is targeting is the Local Government Pensions Scheme which is currently worth £360 billion.

It want to encourage Local Governments to invest more of this in Britain, specifically in the new National Wealth Fund which is going to help kick start green energy projects.

The government's theory is that local governments are currently paying out more than £2bn in fees to mainly global pension funds. It wants more of that money invested in British projects...

Anti-global and ant-decentralist....?

However this LGPS money is currently held in 87 separate funds.

Imagine how difficult it's going to be to get to that cash, controlled by local council officials.

It's also not clear whether a centralised state directed fund focused on domestic investment would produce higher returns than globalised lower risk portfolios.

If not then millions of public sector workers may well have to find extra funds to top up their private pensions.

Final thoughts....

These changes may never happen.

All of this is under review, could well take years, then delivery, might take two or even three terms.

It'll probably never happen!