 and DB schemes could play in productive investment whilst still securing members' interests and protecting the sound functioning and effectiveness of the gilt market. The PPF currently protects people in retirement schemes when their employer goes bust but the pensions lifeboat has consistently delivered higher returns than many other schemes thanks to its large and diverse investment portfolio. Earlier this year, Sir Tony Blair's think tank proposed merging thousands of smaller DB schemes into just half a dozen £400bn superfunds to turbocharge investment in businesses and infrastructure. While Webb said he disagrees with Blair's 'horrifically complicated' proposal, he said reforming the sector to make better use of DB scheme assets has the potential to be 'win-win'. He said: 'There is the potential for these huge funds to be invested for long-term growth creating a larger 'pie' to be shared around, whilst ensuring DB member benefits are fully secured.' As well as boosting retirement incomes, Hunt hopes his new reforms will also improve the standing of London's financial sector. The Chancellor hopes that the reforms will channel pension capital into fast-growing British businesses, allowing them to grow in the UK and ultimately list in London. The City has struggled to attract new stoc){kind=link}
Reforms aim to boost future generations’ retirement incomes by as much as £1,000 annually
Jeremy Hunt used his first Mansion House speech on Monday night to make a bold pledge: today’s young workers will be £1,000-a-year better off in retirement thanks to a series of post-Brexit reforms.
The Chancellor hopes to unlock better returns for pension savers by encouraging retirement funds to invest more cash in riskier – but higher yielding – ventures such as start-ups and private equity.
While the Chancellor’s plans may be met with scepticism in certain parts of the City, executives in the Square Mile largely welcomed the Government’s attempts to overhaul the investment landscape amid growing fears that London is falling behind rival financial centres.
UK pension funds stand accused of becoming increasingly conservative in their investment strategies over the last two decades to the detriment of both pensioners and businesses.