Reform vows to overhaul pension schemes for new local government workers
BBC World
February 23, 2026
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Reform has unveiled ambitious plans to overhaul local government pension schemes, with a focus on replacing generous defined benefit plans for new workers with less secure defined contribution schemes. This move, if implemented, would merge nearly 100 separate schemes into a £500bn British Sovereign Wealth Fund, aiming to boost investments in UK companies, housing, and infrastructure by £100bn. Richard Tice, head of Reform's proposed Department of Business Trade and Energy, will outline these plans in a speech, alongside vows to scrap environmental targets and new employment rights protections, such as sick pay and unfair dismissal safeguards.
The proposal has sparked sharp criticism from labor unions, with Unison and Prospect warning that the changes would undermine workers' rights, exacerbate recruitment challenges in local government, and reduce retirement income for public servants. Defined benefit schemes differ from state pensions, as they are funded by contributions from both employees and employers, guaranteeing a set income in retirement often tied to final salaries. Reform's plan to bar new entrants from these schemes and shift new hires to defined contribution plans, where payouts depend on market investments, has been labeled a "baseless attack" on public servants.
Tice's vision also includes redirecting a larger portion of existing pension assets into British companies, with a target of increasing UK shareholdings by 25%—a move Reform claims would inject an extra £100bn into domestic markets. However, critics, including the Bank of England governor, have expressed skepticism about mandating such investments, citing concerns over market distortion and weaker returns compared to global markets. The government has previously hinted at merging pension schemes but stopped short of ending defined benefit plans.
Reform's broader agenda extends beyond pensions, with
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Originally published on BBC World on 2/23/2026