The pension industry needs 'big reform'
18 April 2023
It has been reported that the Chancellor, Jeremy Hunt, has suggested that Britain’s pension industry needs “big reform” to ensure that savers are getting good returns on their pension investments.
The Chancellor proposed that defined contribution (DC) schemes specifically will provide the “biggest opportunities to unlock investment into high growth British industries.” The pension systems from other countries were given as an example, where the super funds have the ability to make large scale investments in a range of assets, compared to the UK’s larger number of smaller schemes. However there is potential to take on more risk with these types of schemes.
Mr Hunt said:
"And countries like Australia and Canada have found a way of making sure that they get better returns by consolidating their pension fund industry in a way that makes it easier for them to invest in unlisted and potentially higher growth vehicles and that’s the thing I think needs to be worked on.
My concern is that pensioners and future pensioners are not getting the returns that they could expect."
The Chancellor announced in the Spring Budget 2023 that the Lifetime Allowance (LTA), rather than being increased, would be completely abolished. Currently set at £1,073,100 it will be removed from April 2023 and abolished in 2024 when the legislative framework allows.
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