A MASSIVE council-run pension fund in Worcestershire has struck a £6.5 billion investment deal which is set to save taxpayers millions.

Worcestershire County Council's pension pot, which has 55,000 members, is going to pull together cash with six other parts of the UK to make the huge share investment.

A group has emerged known as 'The Shires', which will see the county link up with Leicestershire, Cheshire, Nottinghamshire, Shropshire, Staffordshire and Warwickshire to sink the money into shares that track indices like the FTSE.

It means the fees Worcestershire's pension pot would need to pay to make the investments will drop by around 50 per cent, saving millions.

The deal is the first of its kind in the UK and will bring some relief to County Hall, which has faced criticism over the fund in recent months.

In October we reported how a global tumble in the value of coal had seen £24 million wiped off its value, one of the worst rates in the UK.

And for the last three years some campaigners have urged bosses to stop investing in tobacco, saying it contradicts the council's aims of making Worcestershire healthier.

The massive fund has a current market value of £1.9 billion and has 21,000 people paying into it every month accepting employees from the NHS, police, fire service, other councils, schools, colleges and a raft of outside bodies.

Leader Councillor Adrian Hardman, who chairs its advisory panel, said: "This is a great result for the thousands of members of our pension fund, and for all of the pension schemes in the group.

"Joining forces with other pension funds has enabled us to unlock significant savings and gives clear and tangible evidence of what can be achieved if (we) are willing to work together and collaborate as equals."

Talks over setting up the investment deal had been going in for the last five months.

In October we revealed that the fund had investments with coal firms like BHP Billiton, Rio Tinto, Glencore and Anglo American, with the value of those shares crashing by £23.6 million over an 18-month period.

Only council-led pension pots in Manchester, Teeside, East Riding, Kent and Strathclyde fared worse - see that story HERE.