Richard Tice: The LGPS currently has 'no vision, no purpose of backing Britain whatsoever, and is being massively overcharged'
Reform UK will merge the Local Government Pension Scheme (LGPS) into a single £500bn sovereign wealth fund in a bid to “patriotically back Britain” at the same time as switching new joiners of council schemes to a defined contribution (DC) alternative.
In a speech in Birmingham today (24 February), Reform UK deputy leader and its spokesman for business, trade and energy Richard Tice set out proposals to merge around 100 LGPS funds into a single British Sovereign Wealth Fund.
Tice – who is also the MP for Boston and Skegness – said: "We all think of the success of the Norwegian and Singaporean funds… We could do that. We could have a fund patriotically backing British companies, buying and promoting British products, and being involved in building hundreds of thousands of affordable homes for British workers and for our veterans."
He added this fund could be invested in a similar way to Norway's sovereign wealth fund – holding some 75% in mainly listed equities, with around one-third of this in UK assets.
Tice said: "That would be an increase of over £100bn of investment into the UK stock market, which would mean more confidence, higher valuations, and more new listings that keep businesses growing here."
Richard Tice lays out Reform UK's plans for business, energy and the LGPS.https://t.co/Tq8XuJ5fvO
— Reform UK (@reformparty_uk) February 24, 2026
Richard Tice lays out Reform UK's plans for business, energy and the LGPS (skip to 9:44 for the start of Richard's speech).
He said the LGPS currently has assets of around £500bn, covering some 98 funds and having nearly 7.75 million members but, while "well intentioned", was being "woefully managed in a completely disparate, uncoordinated way".
Tice said the LGPS currently has "no vision, no purpose of backing Britain whatsoever, and is being massively overcharged" at the same time it was "underperforming hugely and never meeting its benchmarks".
He cited the LGPS's property holdings as an example – saying the scheme held a total of around £30bn in the asset class, but had "no collective thinking and no coordination".
Tice added that, when he worked in the property world, council pension funds were known as the "sucker of last resort" but pledged that Reform UK – and its plan for an LGPS sovereign wealth fund – could change this and become a "poacher turned gamekeeper acting on behalf of the British taxpayer".
Tice said he believed one of the reasons LGPS funds were underperforming was because they were "investing in a whole load of woke nonsense" – noting that one LGPS fund was investing in a sustainable equity fund that missed its benchmark by 5% in one year alone.
He said: "This is insanity. Instead, we can transform this into a British sovereign wealth fund, proudly paying all of the members and pensioners, while patriotically backing Britain all of the way."
A DC alternative
Tice also put forward Reform UK's plans for the sustainability of local government pensions.
He said that, while the rights, benefits and entitlements of all the existing members were "absolutely rock solid" and "protected" under these proposals – backed by a huge surplus in LGPS funds – new council employees will join a new DC scheme.
He said a new DC plan would be "akin to the best of the FTSE 100 pension schemes" – but noted that, closing the existing defined benefit (DB) scheme to new members and reduce its liabilities over the coming decades would be "the right thing to do".
Tice said such a move would also allow councils to cut employer contributions to the existing council schemes – a move that would save councils "millions and millions and millions of pounds every single year".
'Concerning' proposals
Pensions UK said Reform UK's plans to transform the LGPS into a sovereign wealth fund and remove DB pension access for new workers were "concerning" and "not supported by evidence".
The trade body's executive director of policy and advocacy Zoe Alexander said: "We simply do not recognise the picture of the LGPS that Reform UK has painted.
"The LGPS is one of the largest and most successful pension schemes in the world. It is fully funded and undergoing a major reform programme to consolidate its assets into six large investment pools ranging from £25-100bn, with savings to date estimated at £1bn, and with further savings to come. It is an exemplar of UK investment amongst pension schemes, with an allocation of around 17%. LGPS investment performance for England and Wales has been strong, with the scheme having achieved a return of around 7% per annum over the last decade."
Alexander said Reform's proposals were lacking in detail, but its intentions to place all new staff into a DC scheme and to transform the scheme into a sovereign wealth fund were concerning.
She said: "The LGPS exists solely to fund the retirements of close to 7 million local government workers, many of whom are low earners. It does not exist to manage a pool of assets to fund government projects.
"With average pension sums received of around £5,000 per year, LGPS members rely on the scheme to invest solely to fund their retirements. Any policy proposing changes to the structure or approach of one of the largest pension funds in the world should be supported by evidence, and detailed plans."
Alexander added: "We stand ready to engage with Reform to ensure they have a full picture of the operation and strategic direction of the LGPS."
‘Ludicrous' affordability and ‘egregious' fees
This is not the first time Reform UK has mooted drastic reforms to the LGPS and hit out at the scheme's management.
Last May, Tice said Reform UK pledged to take an axe to final salary schemes, describing them as unaffordable and an "outrage".
At the time, he told The Telegraph: "Whether people like it or not we should not be employing people on DB schemes.
"It's an outrage – the public can't afford it. It's absolutely ludicrous, and this is why the country is going bust and it's all got to stop."
He added that under the current scheme, many councils were having to contribute up to 30% of their officials' salaries – contributions he said were substantially more generous than those in the private sector.
Tice has also previously taken aim at the fees the LGPS pays its asset managers.
At the beginning of September last year, the Financial Times (FT) reported Tice's claims that local authorities in England and Wales were paying at least £1bn more than they should in fees to fund managers, with inadequate performance costing between £8bn and £10bn annually over the past five years.
Reform UK said it analysed the LGPS schemes of the 13 administering authorities it controls – benchmarking them against a portfolio 75% invested in passive global equities and 25% invested in global bond trackers.
It said the 13 funds had underperformed by an average of 1.9% a year since 2019 – adding that the average fee charged by managers was 0.5%, what Tice said was an overpayment of roughly £265m. He called for fees to be capped at about 0.1%.
Tice said that "for too long, British taxpayers have been taken for mugs" – describing the expenditure by pension funds as "enormous" and the fees as "frankly egregious".
