Pensions report cuts Reeves’ planned growth funds from £160bn to £11bn
Plans to invest £160bn of surplus funds from final salary pension schemes to boost the UK economy over the next 10 years have been dealt a blow by a Whitehall assessment that found there was likely to be little more than £11bn available to spend.In a knock to Rachel Reeves’s growth agenda, a report by civil servants at the Department for Work and Pensions (DWP) found that the expected surpluses in occupational schemes would be used by businesses to offload their pension liabilities to insurance companies.It could mean that as little as £8.4bn would be available for companies to invest in new equipment or technology, but the figure was likely to be nearer £11bn, the DWP said on Friday.“It is estimated that an additional £11.
2bn surplus will be extracted as a result of the preferred option to legislate over a 10-year period,” the report said.Pension surpluses were a significant pillar of the chancellor’s plans to use private sector funds to grow the economy during a period when state funds are likely to be severely restricted.Reeves is expected to lay out her growth plans on Wednesday in the spending review, which will set out the government priorities for the next year.Earlier this year she said about 75% of final salary schemes, also known as defined benefit schemes, were in surplus, worth £160bn, but restrictions have meant businesses have struggled to invest them.In her Mansion House speech in November, Reeves also outlined proposals for pension megafunds to be created from individual defined contribution schemes and a merger of local authority pension schemes to make the pensions industry more cost-effective.
A pensions bill going through parliament will allow pension fund trustees to unlock trapped surplus funds that Reeves said would increase investment in British businesses and lift economic growth,Hundreds of final salary schemes, which spent decades in deficit, meaning the value of their obligations to members outweighed their assets, have moved into surplus in recent years after an increase in interest rates,“Although fewer than 700,000 people are actively saving into a private sector defined benefit scheme, the sector remains a significant market within the UK economic landscape,” the report said,“Across around 5,000 schemes, around nine million members are being supported with assets of around £1,2tn.
”An impact assessment by DWP officials said legislation was needed to overhaul the pension system and give trustees the power to access surplus funds.It said a failure to act would also mean “an opportunity to benefit members, businesses and to drive economic growth would be missed.Therefore ‘do nothing’ is not considered a desirable option.”However, a combination of factors means the expected surplus for investment is reduced to no more than £12bn over 10 years, in part because the legislation does not force trustees of defined benefit funds to use surpluses for investment, and that most occupational final salary schemes have reached a level where a buyout is possible.In a note for the Pension Insurance Corporation, an independent expert, John Ralfe, said: “Forget about £160bn of pension surpluses just waiting, as Rachel Reeves said, to be paid out to ‘drive growth and boost working people’s pension pots’.
“The DWP figures estimate just a fraction of this – under £12bn – will be paid out over the next 10 years, mainly because most companies want a full buyout with an insurance company,“And the bill contains no details of how pensions will be protected if cash is withdrawn,Member security must be a priority with strict rules on repaying amounts if funding deteriorates,” he added,Many pension fund trustees are known to be concerned that allowing company boards access to surplus funds could leave their schemes vulnerable after a panic in financial markets,Without strong safeguards, giving businesses access to surplus pension funds could also make them more attractive targets for foreign takeovers.
It is understood the new regime will allow trustees to block moves to access surplus funds if they believe it will undermine the safety of the fund.The pensions minister Torsten Bell said: “I have read the impact assessment, and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.”The Treasury and the DWP were contacted for comment.
Inspired Perese try edges Leicester past Sale and into Premiership final
And so it is the two grand old clubs of English rugby. Leicester will face off against Bath in the Premiership final at Twickenham next Saturday – and the rest of us will have to check which century we are in.Leicester, admittedly, have featured far more among the honours this millennium, which is to say at all, than their arch rivals from the West Country, who so dominated the 1980s and 1990s. But neither team, if you asked their hoariest old warriors, could pick a foe they would rather lock horns with on what will no doubt be a sunny afternoon at HQ.This was a darker and more swirling affair
Lambourn storms to Derby triumph with 11th victory for Aidan O’Brien
“Everything in Ballydoyle is about Epsom,” Aidan O’Brien said on Saturday after the Derby, and perhaps a little superfluously, as Lambourn’s 13-2 success in the colts’ Classic had just sealed a clean sweep of the three Group One events at the meeting. Lambourn was not the first string in the trainer’s three-strong team – Delacroix, the 2-1 favourite with Ryan Moore in the saddle was only ninth – but like every other horse at the yard, he had been prepared like an Epsom horse from his first days at the yard.Like Minnie Hauk, Friday’s Oaks winner, he had also been sent to Chester’s May meeting, where the undulations and turns are similar to those at Epsom, to complete his preparation for Saturday’s race, and having been sent straight into the lead by Wayne Lordan, his jockey, he gained another length or two on his field with a slick, assured passage down the hill and around Tattenham Corner.Lazy Griff, who was one and a half lengths behind Lambourn in the Chester Vase, had also been close to the pace from the off and briefly threatened to make inroads into Lambourn’s lead from three out, but Lambourn found more when Lordan asked for a final effort and he was nearly four lengths in front of Lazy Griff (50-1) and Christophe Soumillon at the line. Tennessee Stud, another outsider at 28-1, was third for trainer Joseph O’Brien, the winning jockey aboard Australia, Lambourn’s sire, in 2014
Coco Gauff beats Aryna Sabalenka to win French Open women’s singles final – as it happened
Tumaini Carayol’s report is here, after that epic final. It should go down as a classic. If the play didn’t always hit the heights, the drama certainly did.Dodgy microphone means a tearful Coco does a Norman Collier, and it’s hard to hear her. She thanks her mum who is straining to hear
Coco Gauff claims first French Open title after fightback floors Aryna Sabalenka
In her half-decade competing at the highest level, Coco Gauff has built an impermeable reputation for her toughness in battle. No matter the significance of the occasion or the state of her strokes, she will fight with everything at her disposal and make life incredibly difficult for any opponent. More often than not, she will find a way through.Across the net from the best player in the world in one of the most important occasions of her career, Gauff showed the full magnitude of her grit and durability to topple Aryna Sabalenka 6-7 (5), 6-2, 6-4 and win her first French Open title.When Gauff first emerged on the tour as a precocious 15-year-old in 2019, many people had doubts about whether she would be able to live up to the hype and establish herself as a major champion
Hull KR end 45-year wait for Challenge Cup glory as late try denies Warrington
As the rain hammered down on the Wembley turf and Hull KR’s players fell to their knees in disbelief, it was difficult to know where to look first. To Mikey Lewis perhaps, the Rovers half-back, who kicked the goal that secured a first major trophy in 40 years and their first Challenge Cup since 1980. To Willie Peters on the touchline, the coach who has masterminded Hull KR’s rise and has now won the Challenge Cup, something that confirms them as one of Super League’s elite sides.Or to the stands, to the tens of thousands of fans who had made the trip from Hull and finally witnessed history after so many years of heartbreak and near-misses. Among them, their owner, Neil Hudgell, who has saved the club from financial ruin on multiple occasions and now has the piece of silverware his commitment merits
Simone Biles slams ‘sore loser’ Riley Gaines over attacks on trans athlete
Seven-time Olympic gold medallist Simone Biles has publicly condemned former competitive swimmer Riley Gaines for her repeated attacks on transgender athletes, calling Gaines “sick” and a “sore loser” in a strongly worded social media post.The exchange erupted Friday night after Gaines mocked the Minnesota State High School League for turning off comments on a post celebrating Champlin Park High School’s girls’ softball team, which had just won the state championship. One of the team’s players is a transgender girl.“This championship was hijacked,” Gaines wrote on X, referring to the student-athlete as “a boy” and ridiculing the league for disabling comments “lol”.Biles, the most decorated gymnast of all time with 11 Olympic and 30 world championship medals, had seen enough
Stephen Colbert on Trump v Musk: ‘Like Real Housewives on the girls’ trip’
480 sheeps’ heads in jars: Dark Mofo opens with another gory provocation
Straw review – Taraji P Henson rises above Tyler Perry’s tortured Netflix thriller
Cardiff’s first modern art museum will aim to showcase Welsh talent
Explain it to me quickly: What is aura farming, and is it cool or cringe?
Jimmy Kimmel: ‘Between Elon and Melania, Trump now has two foreigners who won’t sleep with him’