The Pensions and Lifetime Savings Associations responds to the Spring Budget 2024

Nigel Peaple, Director of Policy and Advocacy at the Pensions and Lifetime Savings Association, said; “Today the Chancellor has announced a number of sensible measures to help pensions achieve the Government’s three goals of meeting saver needs, supporting the gilt market, and supporting UK growth, however, more action is needed to increase pension adequacy and to attract pension fund investment into the UK.

"While pension schemes already invest very heavily in the UK – approaching a £1 trillion per year – especially via the gilt market, it makes sense for the Government to introduce incentives - regulatory, fiscal or reporting - that attract DC pension fund money towards UK investments, while also ensuring that investment decisions must be taken in the interest of pension savers.

“Together with the ABI, the PLSA recently set out four ways in which Government could take action to encourage greater investment in the UK. These include raising automatic enrolment contributions, amending regulation so it enables more pension investment in growth assets, improving the pipeline of UK investible opportunities, and carrying on with the current approach to pension scheme consolidation where this is in line with the interests of scheme members.

“We welcome that the Government today and over the last 6 months has adopted some of our priority measures, for example the introduction of a Value for Money regime, greater flexibility for DB funding rules, and an extended remit for the British Business Bank, but we hope they will go further. Above all, the Government should set out a timetable to increase the level of automatic enrolment pension saving in the workplace so that, over the next decade, the level of saving gradually increases from 8% to 12%, with the majority of the rise being met by employers.”

LIFTS

“We welcome the announcements regarding the winners of the LIFTs initiatives. The PLSA also believes that the Government should consider the introduction of extra fiscal incentives for pension funds to invest in UK companies. We know from our research that this would be popular both with pension schemes and members of the public. The majority of pension funds responding to the survey (70%) and many savers (67%) think the Government should provide such incentives.”

TRIPLE LOCK

“Positive news for pension savers comes in the form of the affirmation of maintaining the triple lock, something the PLSA requested in its Budget submission earlier this year. This is a vital protection against pensioner poverty. At current pension saving levels, 20% of people are projected to fall short of even the Minimum Retirement Living Standard of £14,400 per year.”

LIFETIME PROVIDER

“While some might imagine that elements of the Lifetime Provider model are appealing to savers, PLSA research reveals that over two-thirds (69%) of employees would prefer their employer to choose their workplace pension provider. We believe they are right in this assessment as employer involvement helps negotiate down pension costs and enables employees on lower incomes to benefit from the cross-subsidies of being in a group of pension savers at their workplace.

“The pension industry, therefore, welcomes, the Government’s decision to not introduce the “Lifetime Provider Model” at present and to instead undertake further analysis to understand the pros and cons of such an approach, and to better understand the views of savers, employers and pension scheme providers.”

ESG RATINGS

“Our members have long expressed concerns about the consistency and reliability of ESG ratings. Ratings play an important part in making investment decisions and ensuring we have a consistent and robust reporting framework is a key part of tackling the climate challenge. We welcome proposals to strengthen regulation and look forward to engaging with proposals.”

Cali Sullivan, PR Manager

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