皇冠体育app

• Chancellor to outline reforms to boost pensions and increase investment in British businesses
• the 鈥楳ansion House Reforms鈥� could unlock an additional 拢75 billion for high growth businesses, while reforms to defined contribution pension schemes will increase a typical earner鈥檚 pension pot by 12% over the course of a career
• comprehensive reforms will increase pension pots by as much as 拢16,000

皇冠体育app reforms will also unlock up to 拢75 billion of additional investment from defined contribution and local government pensions, supporting the Prime Minister鈥檚 priority of growing the economy, and delivering tangible benefits to pensions savers.

皇冠体育app United Kingdom has the largest pension market in Europe, worth over 拢2.5 trillion. Over the past ten years Automatic Enrolment has helped an extra ten million people save for their futures, with聽拢115 billion saved in 2021, but how this money is invested is limiting returns for savers. Comparable Australian schemes invest ten times more in private markets than UK schemes, reaping the rewards that UK savers are missing out on.

To level the playing field, the Chancellor and the Lord Mayor have supported an agreement between nine of the UK鈥檚 largest Defined Contribution pension providers, committing them to the objective of allocating 5% of assets聽in their default funds to unlisted equities by 2030. 皇冠体育appse providers represent over 拢400 billion in assets and the majority of the UK鈥檚 Defined Contribution workplace pensions market.

This could unlock up to 拢50 billion of investment in high growth companies by 2030 if all UK Defined Contribution pension schemes follow suit.

More effective investments by defined contribution pension schemes will also increase savers鈥� pension pots by up to 12%, or as much as 拢16,000 for an average earner.

Chancellor of the Exchequer Jeremy Hunt said:

鈥淏ritish pensioners should benefit from British business success. By unlocking investment, we will boost retirement income by over 拢1,000 a year for typical earner over the course of their career.

鈥淭his also means more investment in our most promising companies, driving growth in the UK.鈥�

Secretary of State for Work and Pensions Mel Stride said:

鈥淏ritish workers should have the confidence that their pension savings are working as hard as they are.

鈥淥ur reforms will benefit savers and society 鈥� unlocking investment into pioneering UK businesses, growing the economy, and helping the record number of people in this country saving into a pension to achieve the retirement they want.鈥�

皇冠体育app Chancellor鈥檚 Mansion House Reforms will also deliver better returns for savers through a new Value for Money Framework which will make clear that investment decisions made by pension firms should be based on overall long-term returns and not simply costs. Pension schemes which are not achieving the best possible outcome for their members will be wound up into larger, better performing schemes.

Analysis shows that over a five-year period there can be as much as 46% difference between the best and worst performing pension schemes. This means that a saver with a pot of 拢10,000 could have notionally lost 拢5,000 over a 5-year period from being in a lowest performing scheme.

皇冠体育app Mansion House Reforms will be guided by the Chancellor鈥檚 three golden rules: to secure the best possible outcome for pension savers; to always prioritise a strong and diversified gilt market as we seek to deliver an evolutionary, rather than revolutionary, change in our pensions market; and to strengthen the UK鈥檚 position as a leading financial centre to create wealth and fund public services.

To ensure that the money unlocked by these reforms is invested quickly and effectively, the Chancellor has asked the British Business Bank to explore the case for government to play a greater role in establishing investment vehicles, drawing upon the BBB鈥檚 skills and expertise.

This will complement the 拢250 million of support that government has made available through the Long-term Investment for Technology and Science (LIFTS) initiative to incentivise new industry-led investment vehicles.

皇冠体育app government will also encourage the establishment of new Collective Defined Contribution funds which can invest more effectively by pooling assets as well as launch a call for evidence to explore how we can support pension trustees to improve their skills, overcome cultural barriers and realise the best outcomes for their pension schemes and subsequently their members.

Defined Benefit pensions

For the Local Government Pension Schemes a consultation will be launched on setting an ambition to double existing investments in private equity to 10%, which could unlock 拢25 billion by 2030. 皇冠体育app consultation proposes a deadline of March 2025 for all Local Government Pension Scheme funds to transfer their assets into LGPS pools and setting a direction that each pool should exceed 拢50 billion of assets.

To improve outcomes for savers in a highly fragmented market, with over 5,000 Defined Benefit Schemes, the government will set out its plans on introducing a permanent superfund regulatory regime to provide sponsoring employers and trustees with a new way of managing Defined Benefit liabilities.

A new call for evidence will also launch tomorrow on the possible role of the Pension Protection Fund and the part Defined Benefit schemes could play in productive investment whilst securing members鈥� interests and protecting the sound functioning and effectiveness of the gilt market.

Capital Markets

皇冠体育app UK has the largest stock market in Europe and one of the deepest in the world 鈥� the London Stock Exchange had the most Initial Public Offerings (IPOs) outside of the US in 2021.

A comprehensive set of reforms will help attract the fastest growing companies in the world to grow and list in the UK. Prospectuses will be simplified, another milestone of Lord Hill鈥檚 UK Listing Review, replacing the EU鈥檚 outdated regime.

Firm鈥檚 prospectuses for investors will be easier to produce, more accessible and understandable, saving companies time and money and attracting more firms to do business in the UK.

Protectionist rules inherited from our time in the EU will be abolished. 皇冠体育app Share Trading Obligation and Double Volume Cap have held back UK businesses and will be removed so firms can access the best and most liquid markets anywhere in the world.

皇冠体育app government has also accepted all of Rachel Kent鈥檚 Research Review published today, paving the way for a new 鈥楻esearch Platform鈥� that will provide a one-stop-shop for firms looking for research experts. It also sets the path for potentially removing the unbundling rules 鈥� an inherited EU law that requires brokers to charge a separate fee for research.

皇冠体育app Chancellor will set out plans to establish an entirely new kind of stock market that allows private companies to access capital markets without floating on a stock exchange. This 鈥業ntermittent Trading Venue鈥� would be a world first and will help firms grow and boost the UK economy. It will be complemented by a move to make shares fully digital rather than written on paper, saving businesses time and money.

This builds on the Chancellor鈥檚 Edinburgh Reforms and Solvency II reforms which will unlock over 拢100 billion of productive investment from insurance firms across the UK over a decade.

Seizing the opportunities of the future

To ensure the continued success of the UK鈥檚 world-leading financial services sector, firms must be ready to innovate faster, with regulators willing to support them as they do.

Following the Financial Services and Markets Act 2023 passing into law, the government has announced that it is commencing repeal of almost 100 pieces of unnecessary retained EU law for financial services, further simplifying the UK鈥檚 regulatory rulebook.

皇冠体育app government launched an independent review into the future of payments - led by Joe Garner, former Chief Executive Officer of Nationwide Building Society - to help deliver the next generation of world class retail payments, including looking at mobile payments.

皇冠体育app government also welcomes a report suggesting ways to move to fully digital shares, scrapping outdated paper-based shares. This will make markets more efficient and modernize how people own shares.

Further information

• 皇冠体育app Mansion House Compact members are: Aviva; Scottish Widows; L&G; Aegon; Phoenix; Nest; Smart Pension; M&G; Mercer.
• 皇冠体育app package of reforms announced today could help increase pension pots for an average earner who starts saving at 18 by 12% over their career - over 拢1,000 more a year in retirement 鈥� all whilst supporting UK economy, businesses, and employment.
• Analysis shows a difference in returns between schemes over a 5-year period of up to 46% in some cases. This means that a saver with a pot of 拢10,000 could have notionally lost 拢5,000 over a 5-year period from being in a lowest performing scheme.

Reaction to the Chancellor鈥檚 Mansion House Reforms

Jamie Dimon, Chairman & CEO, JPMorgan Chase said:

鈥淕reat financial centers stay competitive by responding to the market and evolving through the kinds of important iterations that the Chancellor has announced. It鈥檚 also good to see the U.K. preparing for the industries of tomorrow considering the great promise of life sciences and A.I. as cornerstones of the economy in the years to come.鈥�

Sir Jon Symonds CBE, Chair, GSK said:

鈥淚 welcome these important reforms which will further strengthen the UK capital markets and support economic growth.聽 皇冠体育app changes will help increase investment returns for pension savers through improved access to all asset classes including in high growth sectors, and ensure the UK鈥檚 most innovative companies are better supported by UK capital to stay in this country as they scale to maturity.鈥�

Brent Hoberman, Executive Chairman & Co-Founder, Founders Forum, Founders Factory said:

鈥溁使谔逵齛pp planned pension reforms will enable for capital to be productively invested in funds and scaleup companies in the UK.聽 This should be welcome news to the UK industries of the future, their ability to attract more capital will create more national champions and generate growth, jobs and increased tax revenue.鈥�

鈥溁使谔逵齛pp reforms will enable the UK to build on the positive momentum in these key parts of the economy drive further synergies between it鈥檚 world class financial institutions and entrepreneurial base.鈥�

C. S. Venkatakrishnan, Group Chief Executive, Barclays said:

鈥溁使谔逵齛pp UK聽has needed聽a bold, forward-looking policy agenda and industrial strategy to grow the economy.聽皇冠体育appse Mansion House Reforms are an important step in聽the right direction in mobilising private capital to support growth and innovation.鈥�

Irene Graham OBE, CEO, ScaleUp Institute said:

鈥溁使谔逵齛pp package of measures announced by the Chancellor today are very much welcomed by the ScaleUp Institute. 皇冠体育appy contain significant and innovative solutions which will help to enable easier and simpler access to capital markets and patient growth capital. 皇冠体育appse new initiatives, coupled with the reforms already underway, will support and fuel the global ambitions of our scaleups, and high-potential scaling businesses, across all sectors and all areas of the UK.鈥�

Miles Celic, Chief Executive Officer, 皇冠体育appCityUK, said:

鈥溁使谔逵齛pp competitiveness and attractiveness of any successful international financial centre must, by definition, always be a work in progress. 皇冠体育app Chancellor is right to be ambitious in building on the UK鈥檚 successes and recognising that we can鈥檛 afford to be complacent.

鈥溁使谔逵齛pp Mansion House Reforms are ambitious, pragmatic and necessary. 皇冠体育appy will underpin the UK industry鈥檚 future success. Most importantly, their main beneficiaries will be the British people, who will gain from greater investments in growing businesses, revitalising communities and improving retirements.鈥�

Chris Hulatt, Co-Founder, Octopus Group said:

鈥淲e welcome government鈥檚 efforts to make the UK a more attractive place to start a business, and support measures that provide additional opportunities for private companies to raise capital.

鈥淔inding new ways for the most skilled and talented entrepreneurs to access capital as they build businesses is fundamental to helping the UK maintain its place as the best place to start, build and scale a business.鈥�

Noel Quinn, Group Chief Executive, HSBC said:

鈥淚 welcome the strong and comprehensive package of measures announced by the Chancellor in his Mansion House speech.聽 Unlocking equity to support companies in innovative high-growth sectors such as technology and life sciences is vital to the future growth of the UK economy.鈥�

Lord Mayor, Nicholas Lyons said:

鈥溁使谔逵齛ppse reforms and the Mansion House Compact mark a historic turning point that will accomplish the dual aim of securing a brighter future for retirees and channelling billions into our economy.聽 I鈥檓 proud to have convened key industry players to make this commitment to unlock 拢50bn in capital by the end of the decade which will improve returns for pension savers and support firms to grow, stay and list in the UK.鈥�

Tim Orton, Chief Investment Officer, Aegon UK said:

鈥淎egon UK is proud to be a founder signatory of the Mansion House Compact which will help deliver better long-term outcomes for our customers. We are committed to ensuring our customers can access and share in the growth and success of innovative companies we invest in. We will use our scale and expertise to develop investment solutions seeking to improve the retirement outcomes of the millions of members of the defined contribution pension schemes we support.聽 皇冠体育app Compact will also create opportunities that help deliver our climate targets as we progress towards net zero.鈥�

Sir Nigel Wilson, Group CEO, Legal & General said:

鈥淎s the UK鈥檚 largest manager of money for pension clients, L&G is pleased to support the ambition set by the Compact. Increasing investment in science, technology and infrastructure will support better returns for the tens of millions saving for their retirement, as well as stimulate much needed long-term growth for the UK economy.鈥�

Mark Fawcett, CEO, Nest Invest said:

鈥淔or many years now, illiquid assets have been integral to diversified DC pension schemes around the world. It鈥檚 been a key driver behind Nest setting up our own private market mandates to ensure our members aren鈥檛 missing out. Nest will continue to increase our investment in unlisted equities, helping our 12 million members benefit from the strong returns these types of deals can typically offer.鈥�

Ruston Smith, Chair, Smart said:

鈥淪mart Pension is committed to securing better outcomes for long-term savers. Giving UK savers access to higher net returns by investing in unlisted equities, including innovative, high-growth UK companies as part of a well diversified portfolio, will deliver these outcomes over time. We are pleased to be a signatory of the Mansion House Compact and, as a successful British fintech, we are proud to be supporting the country鈥檚 technology sector, helping home-grown start-ups and scale-ups to flourish and thrive.鈥�

Scottish Widows, CEO, Chirantan Barua said:

鈥溁使谔逵齛pp industry needs to modernise the investment options available to customers.聽 With the right consumer protections in place, the proposals announced today could make a huge difference to our customers and the wider UK economy. I鈥檓 proud that Scottish Widows is a founding signatory of the Mansion House Compact.鈥�

Phil Parkinson, Investments and Retirement Leader, Mercer said:

鈥淢ercer supports proposals that lead to improved pension scheme member outcomes. As a global investment solutions provider, we see first-hand the value that illiquid asset allocations can bring to investors鈥� portfolios from a risk and a return perspective and are in favour of initiatives designed to unlock this asset class for DC members.鈥�

Edward Braham, Chair, M&G said:

鈥淧atient capital put to work in companies or projects over multiple decades is essential to support economic growth and importantly, capture value for people鈥檚 pensions as they save for their retirement. M&G鈥檚 heritage is in investing in private markets, whether it is through infrastructure, real estate or innovative companies with purpose. We are democratising access to private markets through the Prudential With Profits Fund, and are supportive of DC pension reforms that encourage more investment of this kind that has potential to result in positive outcomes for savers.鈥�

Mike Eakins, Chief Investment Officer, Phoenix Group said:

鈥淲e are proud to sign the Compact, which is an important step to allow UK long-term savers to invest in a more diversified portfolio, giving them access to the potential returns of a broader range of assets, in line with their international counterparts. Currently, only 9% of UK pension funds are invested in alternative assets as compared to 23% in other major pensions markets. With the right regulatory environment, Phoenix Group could invest up to 拢40 billion in sustainable and/or productive assets to support economic growth, levelling up and the climate change agenda whilst also keeping policyholder protection at its core.鈥�