Key Takeaways
- • Reform UK leader Richard Tice proposes consolidating the UK's 98 council-run Local Government Pension Scheme funds (about £500bn in assets, 7.75 million members) into a £500bn British Sovereign Wealth Fund, according to a Reform UK video published November 8, 2026.
- • Tice argues the current council pension funds are overcharged and underperforming, citing an estimated £8-10bn a year shortfall; this is his own estimate and has not been independently verified.
- • The proposed fund would hold roughly 75% equities (mainly listed), about a third of which would be UK-invested, with 10% in UK bonds and 15% in local infrastructure and affordable housing, per Tice's description.
- • The plan would close the existing schemes to new joiners in favour of defined contribution schemes, which Tice says would cut employer contributions on existing council funds to around 10%.
- • Unison has publicly criticised the proposal, and Tice has called on union leaders to engage; the proposal is at the policy-announcement stage.
Summary
Reform UK has set out a policy to convert the Local Government Pension Scheme into a £500bn British Sovereign Wealth Fund, as outlined by party leader Richard Tice in a video released November 8, 2026. Tice described the scheme as comprising 98 funds across UK councils with about 7.75 million members, and argued that it is poorly coordinated, lacks a strategic purpose and is overcharged. He cited an estimate of £8-10bn a year in underperformance, a figure he described as his own and not independently checked. Supporting material cited by the video includes an estimate that 13 councils lagged benchmarks by £750m to £1.24bn a year, alongside roughly £265m in fees.
Under the proposal, the fund would invest primarily in listed companies, with some unlisted holdings, under a strategic UK growth mandate. Tice suggested an allocation of around 75% equities, about a third of which would be UK-focused, 10% in UK bonds and 15% in local infrastructure and affordable housing. He estimated this would add more than £100bn to UK equity markets and could deliver up to £1bn of regeneration investment per fund on average. He also referenced the possibility that the fund could acquire British Steel's blast furnaces, and said co-investment from other sovereign and pension funds had been expressed.
To protect existing members, Tice said current benefits would be unchanged, while new council employees would join a defined contribution scheme. He argued that closing the defined benefit schemes to new joiners would reduce liabilities over time and allow employer contributions on existing funds to fall to around 10%. He said liabilities are currently under £300bn, implying a surplus.
The proposal has drawn criticism. According to the video's interviewer, the BBC reported the plan and Unison, the union, was critical of it. Tice said he would welcome engagement from union leaders. He also distanced the policy from broad nationalisation, while referencing earlier government stake proposals.
Under the proposal, the fund would invest primarily in listed companies, with some unlisted holdings, under a strategic UK growth mandate. Tice suggested an allocation of around 75% equities, about a third of which would be UK-focused, 10% in UK bonds and 15% in local infrastructure and affordable housing. He estimated this would add more than £100bn to UK equity markets and could deliver up to £1bn of regeneration investment per fund on average. He also referenced the possibility that the fund could acquire British Steel's blast furnaces, and said co-investment from other sovereign and pension funds had been expressed.
To protect existing members, Tice said current benefits would be unchanged, while new council employees would join a defined contribution scheme. He argued that closing the defined benefit schemes to new joiners would reduce liabilities over time and allow employer contributions on existing funds to fall to around 10%. He said liabilities are currently under £300bn, implying a surplus.
The proposal has drawn criticism. According to the video's interviewer, the BBC reported the plan and Unison, the union, was critical of it. Tice said he would welcome engagement from union leaders. He also distanced the policy from broad nationalisation, while referencing earlier government stake proposals.
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