Rachel Reeves slammed for taking pensioners' money that 'does not belong' to her

Rachel Reeves has faced criticism for "forcing" pension money which "does not belong to the government" into new schemes. Under a new agreement called the , up to £50 billion of investment for UK businesses and major infrastructure projects will be made available through British pension funds.

Some 17 schemes who have signed the accord pledged to invest 10% of their workplace portfolios in assets that boost the economy by 2030. These include infrastructure, property and private equity, with at least 5% of these portfolios ringfenced for the UK. According to the government, the accord is expected to into the economy by the end of the decade.

Yet the plan, spearheaded by chancellor Rachel Reeves, has been criticised by a finance expert who said the plan puts UK pensions at risk.

Antonia Medlicott, managing director of financial education specialists , questioned the motives behind this project and does not believe it will help retirement pots for workers.

She said: "Investment decisions should be made solely on the basis of what will produce the best outcome for the investor. Political pressure - and now a mandate forcing fund managers to make certain choices - should never be the driving force.

"If the investment opportunities being mandated through this pact are genuinely so great for British investors, then they shouldn't need to be forced on anyone. Forcing schemes to channel UK workers' savings into these investments suggests there is an unwillingness to invest in them when given free choice - and that's worrying."

She continued: "That money does not belong to the government; it belongs to those who sacrifice some of their take-home pay every month."

In contrast, the government pointed to the projects which could be supported by the new cash.

A government spokesperson said: "This investment could support clean energy developments across the country, delivering greater energy security and helping to lower household bills, as well as delivering growth finance to Britain's world-leading science and technology businesses - creating jobs, boosting businesses and putting more money into people's pockets.

"Pension savers will also benefit from the commitment to invest in private markets. Comparable Australian schemes invest significantly more in private markets and domestic companies than UK schemes, and research suggests greater investment in private markets can deliver security through diversified asset holdings and potentially drive higher returns."

However, Medlicott said more workers could opt out of their workplace pensions as a result.

She added: "UK workers sacrifice a sizable percentage of their pay every month on the understanding that the money is being put aside to fund their future. Currently, around one in five workers opt out of a workplace pension. That includes a staggering 76% of self-employed workers who aren't currently saving into any pension.

"We are worried that this move will do little to encourage those people to change their minds, because it compromises the ability of pension funds to invest for optimal growth, and prioritises British business over ordinary workers."