UK pension organisations have expressed "strong support" for the government’s Mansion House reforms in a joint letter to Chancellor, Rachel Reeves, welcoming their potential to foster economic growth, drive consolidation, and improve outcomes for savers.

The open letter was lead by the Pensions and Lifetime Savings Association (PLSA) and co-signed by industry organisations, which between them manage over £400bn assets under management.

The letter aimed to highlight the sector’s readiness to collaborate with the government and shape the future of pensions in the UK, underscoring the industry’s view that the Pension Review and the Mansion House reforms set a "positive direction" for the future of the sector.

Whilst the letter acknowledged that UK pension funds are already "significant" domestic investors, it said that the reforms offer additional mechanisms to increase pension investment in UK growth while maintaining a strong focus on fiduciary responsibilities to scheme members.

The letter also expressed support for the completion of the transfer of remaining assets and the articulation of the Local Government Pension Scheme (LGPS) pool model, supported by setting clear and realistic timelines to achieve this goal.  

However, it noted that a lot of good work is already in place across the LGPS, warning that administering authorities and pools should take care further work is done in a pragmatic way, which maintains value and does not incur unnecessary investment losses or costs.

In addition to this, the letter emphasised that consolidation must prioritise members’ interests, achieving value for money through economies of scale and enhanced negotiating power.

While not part of the Mansion House reforms, the letter also highlighted the pensions sector's "critical" role in addressing climate change, welcoming recent environmental, social and governance (ESG)-focused consultations and transition planning initiatives as complementary to the growth agenda.

PLSA CEO, Julian Mund, said; “The UK pensions sector is a cornerstone of our economy, with nearly £1trn invested in UK assets.

"By working closely with the government on the Mansion House reforms, we can ensure the system delivers greater value for savers, supports long-term economic growth, and advances our climate ambitions.

“Consolidation, stronger governance, and economies of scale will drive better outcomes for members, but it must be done pragmatically.

"By aligning with government proposals and safeguarding fiduciary duties, we can secure the best possible future for savers while boosting investment in UK assets and ensuring the system remains globally competitive.”

Adding to this, Reeves said: “The Mansion House reforms I announced, support growth in the financial services sector and help finance investment across the country.

“I want to work with industry and stakeholders to deliver pension reforms that increase investment in infrastructure, boost people’s pension pots and grow the economy.”

The signatories include: Border to Coast Pensions Partnership, Brunel Pension Partnership, Cushon, Legal & General Investment Management (LGIM), NEST, Peoples Partnership, Railpen, Smart Pension, Surrey Pension Fund, Willis Towers Watson UK Limited, Universities Superannuation Scheme, West Midlands Pension Fund and West Yorkshire Pension Fund LGPS Central.

---