New pension rules coming this week with announcement from Rachel Reeves

New pension rules are set to be rolled out in the UK by the new Labour Party government this week. Rachel Reeves is expected to use her maiden Mansion House speech on Thursday to announce plans to use hundreds of billions of pounds in local authority pension schemes to lift growth.

Ms Reeves is expected to map out plans to use hundreds of billions of pounds of capital held in local government pension schemes to lift UK economic growth. Ms Reeves is also expected to address concerns about tax increases announced at the budget last month.

Merging local government pension schemes has the potential to release £200 billion to fortify the UK economy, researchers said. “That fragmentation leads to excessive spending on fund managers and advisers and prevents large-scale investment in productive assets,” the Pension Insurance Corporation said.

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Tracy Blackwell, its chief executive, said: “With this scale, the [local government pension scheme] pools could take on equity sponsorship of UK infrastructure projects crowding in billions of pounds of private investment into British infrastructure and housing, boosting growth and creating significant social value. This would be good for the economy, good for taxpayers and good for communities.”

Ms Reeves is also expected to promote the economic benefits of free trade. The chancellor increased public investment spending by £100 billion over the next five years at the budget, which the Office for Budget Responsibility said would start to improve growth in about ten years.

Local government pension scheme assets total £392 billion but they are controlled by 86 small funds, as the Times newspaper reports. The Chancellor is set to emphasise Britain's "the untapped potential we have here in Britain, the opportunities available that can be realised, the partnerships that can be forged, the wealth that can be created", the opportunities for realisation, forging partnerships, and wealth creation as "the prize on offer".