Rachel Reeves will loosen restrictions on some pensions (Image: Getty)
Chancellor Rachel Reeves will today announce a pensions change that could provide a massive £160billion boost for the economy.
She is to loosen restrictions on defined benefit pensions, which include so-called final salary pensions.
It’s part of her drive to get the UK economy growing after the most recent figures showed a disappointing rise in GDP of just 0.1% in November.
And some of the money could go to pensioners themselves.
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The Chancellor will also set out plans for a building spree expected to include expanding in a major speech.
Defined benefit pension schemes are expected to hold assets worth £800 billion by the end of the decade but there are strict rules about how the money can be invested.
Ms Reeves will give fund managers in well-managed schemes more freedom so that surplus money can be invested in the economy. It will also become possible to give more benefits to pension fund members.
Around three quarters of funds are in surplus, worth £160bn.
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Prime Minister said: “The number one mission of my government is to secure growth, drive higher living standards for everyone, and get more money into people’s pockets.
“To achieve the change our country needs requires nothing short of rewiring the economy. It needs creative reform, the removal of hurdles, and unrelenting focus. Whether it’s how public services are run, regulation or pension rules, my government will not accept the status quo. Today’s changes will unlock billions of investment, pushing forward in delivering my Plan for Change.”
Ms Reeves said: “I know this government and businesses are united on growth being the top priority for our economy, which is why I am fighting every day to tear down the biggest barriers to growth, taking on regulators, planning processes and opposition to this urgent mission.”