Reform UK would abolish defined benefit pension schemes for new council employees under plans outlined by the party’s business, trade and energy spokesperson, Richard Tice.
The proposal would see new local authority workers moved away from traditional guaranteed pension arrangements, replacing them with alternative schemes yet to be fully detailed.
As part of the same policy package, Reform UK says it would merge nearly 100 local government pension schemes into a single £500 billion British Sovereign Wealth Fund.
The party argues that consolidating the schemes would streamline management and unlock significant investment potential. According to Reform, the new fund would be required to invest at least 25% of its assets in British companies and products, with the aim of generating £100 billion in domestic investment.
Supporters of the move say it would boost UK industry and strengthen economic growth by directing pension capital towards national priorities.
However, trade unions have strongly criticised the proposal, warning it could damage recruitment and leave future retirees worse off.
Jon Richards, assistant general secretary of the public service union Unison, told the BBC: “Forcing council staff on to inferior pensions would leave retired workers poorer and worsen an already severe recruitment crisis for local government.”
Local government employers have already faced mounting challenges in recruiting and retaining staff, particularly in social care and specialist roles, amid wider financial pressures on councils across the UK.
The debate over council pensions is likely to become a key battleground as parties set out their economic and public sector reform agendas ahead of the next general election.