Reform UK plans to use £500bn of council pension assets to invest in British businesses
Financial Times
February 24, 2026
AI-Generated Deep Dive Summary
The UK government has proposed a groundbreaking plan to redirect £500 billion from local council pension funds into a new sovereign wealth fund aimed at boosting British businesses. The initiative, championed by the deputy leader as a "huge opportunity" for economic growth, seeks to leverage these substantial assets to invest in key industries and infrastructure projects across the UK. However, experts have expressed skepticism about the plan's feasibility and potential risks.
The proposal envisions creating a fund that would draw upon the £500 billion held by local government pension schemes, which currently provide financial security for millions of public sector workers. The funds would then be reallocated to support British businesses, potentially driving innovation, job creation, and economic recovery following Brexit and the COVID-19 pandemic. Proponents argue that this move could strengthen the UK's industrial base and ensure long-term financial stability.
Critics, however, raise concerns about the scale of the proposal and its potential impact on pensioners' retirement security. They question whether shifting such a large portion of assets would adequately protect against market volatility and inflation risks. Additionally, there are doubts about the governance structure of the fund and how decisions on investment priorities will be made.
The plan has sparked a heated debate among policymakers, business leaders, and financial experts. While supporters view it as a bold step toward building a resilient economy, opponents warn of potential pitfalls, including mismanagement and reduced returns on investments. The government must address these concerns to ensure the fund's success and maintain public trust in the pension system.
Ultimately, the proposal reflects a broader push to restructure the UK's financial framework to better align with national economic goals. If executed effectively, it could serve as a blueprint for similar initiatives globally. However, its long-term impact on both the economy and pension funds will depend heavily on careful planning and stakeholder collaboration.
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Originally published on Financial Times on 2/24/2026