Labour to evaluate different models for pooling if elected

If elected at the next general election, the Labour Party has said it would undertake an in-government pensions and retirement savings review.

In yesterday’s published paper, Financing Growth, Labour said it would review the current state of the pensions and retirement savings landscape to assess whether the current framework would deliver sustainable retirement incomes.

Their vision is based on six policy priorities:

• Deliver inclusive growth of the UK’s financial services sector
• Enhance the international competitiveness of the UK’s financial services sector
• Reinforce consumer protection and financial inclusion
• Lead the world in sustainable finance
• Embrace innovation and fintech as the future of financial services
• Reinvigorate our capital markets

The review will look across the ecosystem – at all types of pensions and retirement savings plans (defined benefit, defined contribution, and public sector schemes including LGPS, at corporate sponsors, at asset managers, and at VCs and private equity) and set out proposals to bring about an approach that will benefit both UK PLC and UK retirees.

In regard to the LGPS, Labour said it would evaluate different models for pooling, including increasing in-house fund management capacity at the pool level, to deliver better returns for savers and increase investment in productive assets.

A Labour government would look to enable the growth of regional financial centres alongside London and Edinburgh through initiatives to expand the footprint of the sector based on the model of other pension funds. Labour would work with the LGPS to set out best practice for adopting similar, cost-effective in-house fund management capabilities within pools to deliver better returns for savers and create new jobs in regions and nations.