Latest news with #MansionHouseAccord
Fibre2Fashion
14-07-2025
- Business
- Fibre2Fashion
BCC urges UK investment reforms ahead of Mansion House speech
Ahead of the UK Chancellor Rachel Reeves' Mansion House speech on July 15, the British Chambers of Commerce (BCC) has called for urgent reforms to unlock business investment and stimulate growth across the UK. Ahead of the July 15 Mansion House speech, the BCC has urged the Chancellor to implement reforms to boost UK business investment. Citing low investment and weak confidence, BCC's Shevaun Haviland called for action on the Mansion House Accord, pension fund consolidation, and a British Growth ISA, stressing the need for smarter regulation to drive regional growth. Drawing from recent research involving over 4,500 firms, the BCC noted persistent low investment levels and fragile business confidence, despite more than half of companies believing the UK economy holds untapped growth potential, the BCC said in a release. Shevaun Haviland, director general of the BCC, said businesses nationwide are eager to hear a clear commitment to investment reform. 'For too long investment has been the Achilles heel of our economy. As we set out in our Blueprint for Growth report, we want to see full implementation of the Mansion House Accord, consolidation of pension default funds, and greater investment in illiquid assets to support regional growth. Tomorrow night is an opportunity for the Chancellor to signal support for these ideas,' she said in a release. Haviland also advocated for the creation of a British Growth ISA to mobilise public investment in UK businesses and called for streamlined regulations that support responsible risk-taking and foster innovation. Fibre2Fashion News Desk (HU)
Yahoo
09-07-2025
- Business
- Yahoo
Bank of England's Bailey opposes cornerstone of Rachel Reeve's pension plans
The governor of the Bank of England has said he does not agree with government proposals that would require large UK pension funds to increase investments in domestic assets as a means to stimulate economic growth. Speaking at the Bank of England's latest Financial Stability Report (FSR) presentation, Andrew Bailey stated that while he acknowledges the long-standing issue of low pension fund investment in the UK economy, he does not support a regulatory mandate to force pension funds to allocate funds to UK companies. 'We've had a low level of pension fund investment in the economy and I think structural changes to the pension industry are helpful in this effect. However, I do not support mandating, I don't think that's appropriate," he said. He added that the current government is taking the same approach as its predecessor on this issue, saying: 'I think reforming the pensions industry does require a lot of heavy lifting but it needs to be done,' he said, but stressed that he hopes changes will be 'natural". Read more: 3.5 million on track to pay higher mortgages by 2028 Earlier this year, chancellor Rachel Reeves had suggested the introduction of a 'backstop' power that would compel pension funds to invest in British assets if necessary. Her proposals gained some traction, with 17 pension funds agreeing under the Mansion House Accord to allocate at least 5% of their assets to the UK by 2030. This commitment includes giving the government the power to enforce domestic investment in the event that voluntary contributions fall short. Reeves is expected to deliver a speech on pensions and investment reforms at the upcoming Mansion House event next week, with anticipation that a detailed strategy paper will outline further steps in addressing the UK's investment landscape. Beyond pension reforms, the BoE governor also said businesses have delayed investment plans due to heightened uncertainty across the global economy. Bailey explained: 'Looking more short term, what we are seeing is firms telling us that as we are seeing a higher level of uncertainty in the world economy, it is causing investment decisions to be delayed. 'That of course can include decisions over whether to raise capital and which markets to raise capital in. 'It is also a theme I pick up when speaking to firms, and that is not surprising as economic theory tells us that since investment decisions are irreversible so as uncertainty goes up you do see delayed investment.' Read more: Pension funds deal to back £50bn of investment for UK private markets and infrastructure The Bank's Financial Policy Committee (FPC) said in its latest report that trade tariffs could increase the risk of some businesses falling behind on loans, while a high proportion of the UK workforce is in sectors more exposed to global shocks. Households and businesses nonetheless remain resilient, and the UK banking system is equipped to support them even if conditions significantly worsen, the FPC said in its latest report. The FPC said there was a high degree of unpredictability around how global trade will evolve, with US president Donald Trump hiking tariff rates in April but negotiations with other countries over possible trade deals ongoing. Conflict in the Middle East has also raised the risk of energy prices spiking, particularly if the supply of oil and gas were disrupted, the FPC found. Read more: Government 'megafund' pension plans could give £6k boost to savers This could particularly impact businesses that are more reliant on financing linked to global financial markets, which have faced turbulence in recent months. 'The potential for much higher trade tariffs increases the likelihood of corporate default in the most exposed sectors, and losses for their lenders,' the report read. The outlook for the UK is weaker and more uncertain than it was in November, when the committee previously produced a report, it said. Read more: What is the Pension Investment Review? How to start investing with an employee share scheme Longest 0% balance transfer credit card deals of the week
Daily Mail
16-06-2025
- Business
- Daily Mail
How do I stop my pension being used to promote economic growth - I think Rachel Reeves is ignoring the risks: STEVE WEBB replies
I would appreciate you doing a piece on the recent Mansion House accord. It worries me for my default pension fund investments with my own pension firm (I see they are signing up). I note Rachel Reeves says it will 'boost pension pots', which ignores the downside risk. And I do not want to take part. Are there pension suitable funds out there that I could select that will not take part in this? To be clear I want to stay with my current provider as my pension is still receiving employer contributions. Steve Webb replies: The Mansion House Accord is a voluntary agreement entered into by 17 large pension schemes and pension providers last month. These schemes have signed up to a target that 10 per cent of the money in what are called their 'main default arrangement' (of which more later) will be invested in 'private markets', with at least half of this being in the UK. You can see which schemes have signed up and read the full text of the Mansion House Accord here. There are a few technical terms used in that description which it is worth explaining, as they are relevant to your question. The first is the idea of a 'default arrangement'. This is simply the place where your money is invested unless you make an active choice to do something different. In most schemes, the vast majority of member savings are held in these 'default' arrangements, but there will generally be other options in which you can invest which are not covered by this agreement. The second is the idea of 'private markets'. Historically, a lot of pension money has been invested in things like the major stock markets in the US, the UK and around the world. Large amounts have also been invested in things like government debt (like UK government bonds, called gilts). These types of investment are in 'public markets'. But governments (and pension schemes) are increasingly interested in other ways of investing which they believe have the potential to generate more economic growth (for society as a whole) and potentially better returns to members. This could include investing in start-up or 'early-stage' businesses which are not (yet) listed on stock markets. It could also include investing directly in things like big infrastructure projects such as the upgrade to the national grid needed in the coming decades as the way we power our economy changes. In principle, there is no reason why an allocation to these 'private markets' should be damaging to your pension. Although the costs tend to be higher, the expected return over the long-term is typically also higher. But it is true to say that there is greater uncertainty about those returns, which is why private markets will typically be only a relatively small part of the overall investment mix – 10 per cent in this case. If you read the text of the Accord, you will see that there are several safeguards built in to protect members. Fiduciary duty: The trustees (and others) who oversee your pension have an over-riding duty to put your interests first. The goal of 10 per cent investment in private markets by 2030 is subject to the trustees being confident that in doing this they are still acting in your best interests. Consumer Duty: In July 2023, the Financial Conduct Authority introduced the powerful concept of 'Consumer Duty' which applies to the insurance companies who provide pensions. In simple terms, they now have an over-riding duty to do right by their customers. Although it is pretty shocking that such a rule was needed, it has already had a powerful impact in the financial services sector. Signatories to the Mansion House Accord have said that they will only pursue the 10 per cent target if it is consistent with their responsibilities under 'Consumer Duty'. You can read more about Consumer Duty here. If the Mansion House Accord was simply a voluntary agreement, with schemes only heading for 10 per cent if they were confident it was in the member's interest and consistent with the duty to do right by their consumers, then you could probably be fairly relaxed about all of this. But there is a sting in the tail. The Government is not convinced that the industry will deliver on this goal (partly based on the slow progress on previous similar initiatives) and so are planning to give themselves a power via the recently-published Pension Schemes Bill to force pension schemes to invest a particular proportion of their default funds in private markets. Although the Bill contains a safeguard where schemes can argue that they should be exempt from this if they are convinced it would not be in the members' interests, this is still a pretty big stick, and will put pressure on schemes to hit the target. My personal view is that the Government simply should not be doing this. If the Mansion House Accord is clear that trustees' first duty is to their members, and that schemes should do right by consumers, then I cannot see how the Government can justify a threat to over-ride all of this. In practice however, a 10 per cent allocation to private markets is probably a reasonable enough thing for large schemes to do, and I suspect that most of the signatories were happy to sign up on the basis that they were planning to go down this route in any case. If you remain unhappy, you have the option of simply moving your workplace pension money into one (or more) of the alternative investment choices available. You should be aware that these funds may have higher charges (as they are not covered by the 0.75 per cent charge cap on workplace pensions) and you will need to understand what level of investment risk you are taking on. But you may be reassured to know that you can stay with your current provider but without being bound to remain in the arrangement covered by the Mansion House Accord. Ask Steve Webb a pension question Former pensions minister Steve Webb is This Is Money's agony uncle. He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement. Steve left the Department for Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock. If you would like to ask Steve a question about pensions, please email him at pensionquestions@ Steve will do his best to reply to your message in a forthcoming column, but he won't be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons. Please include a daytime contact number with your message - this will be kept confidential and not used for marketing purposes. If Steve is unable to answer your question, you can also contact MoneyHelper, a Government-backed organisation which gives free assistance on pensions to the public. It can be found here and its number is 0800 011 3797.
South China Morning Post
15-06-2025
- Business
- South China Morning Post
London and Hong Kong hold the keys to closer UK-China collaboration
Since my last visit to mainland China just 12 months ago, the global trade landscape has undergone drastic change. Navigating tariffs is a frequent topic of discussion, while the importance of trade relationships could not be more prominent. As policy chairman of the City of London Corporation, I strive to ensure that rising global uncertainty does not give way to inertia. As two of the world's leading financial centres, London and Hong Kong have an opportunity to deepen the wider financial services partnership between the UK and China. UK Chancellor of the Exchequer Rachel Reeves has indicated support for respectful and consistent relations with China where we can be open about areas both sides disagree while finding opportunities for secure trade and investment. Otherwise, we won't be able to successfully tackle shared challenges. Reforming capital markets to supercharge investment into companies looking to start operations, scale up and stay within the UK remains one of these key focus areas. The City of London Corporation has supported a significant part of that work, channelling pension investment into high-growth companies through the Mansion House Accord – a landmark industry-led agreement committing £50 billion (US$67.8 billion) of defined contribution pension funds to UK private markets by 2030. China also aims to reform its pension system to meet the evolving needs of its ageing population, with the development of a private pension scheme that acts as a 'third pillar' of support, creating new opportunities for both domestic and international players, including banks, insurance companies and asset managers. This presents a clear opening for the UK asset management industry, which is the largest centre outside the United States. Hong Kong, similarly, is a significant global asset management centre with about HK$31 trillion (US$4 trillion) worth of assets under management at the end of 2023.
Daily Mail
05-06-2025
- Business
- Daily Mail
'Bigger pension pots for Britons': Chancellor says reforms will boost economic growth - here's how
A new Pension Schemes Bill aimed at boosting individual people's pensions and economic growth is being launched by the Government today. The measures include a clampdown on schemes offering poor value for money to savers, creating 'mega' pension funds which can make better investment returns, and merging tiny pots. The Bill will also make pension schemes offer people reaching retirement age clear 'default' options to turn their fund into an income to live on in old age. The Government says millions of people planning retirement will find it easier to manage and get more from their pension pots as a result of its changes. And it will tackle schemes delivering poor returns for savers with a range of reforms, including a new system to show how well they are performing, and forcing them to merge if they are falling short. The Government recently announced that small pension pots worth £1,000 or less could be automatically moved into government-approved 'consolidator' schemes. Meanwhile, in its Mansion House Accord, 17 pension firms voluntarily pledged to put 10 per cent of the funds they manage for savers into UK-based unlisted private businesses and infrastructure projects by 2030. The Government has held off from forcing pension fund managers to invest more in the UK in the new Bill, but not taken this off the table for the future. The Bill also includes: - Creating multi-employer defined contribution pension 'megafunds' of at least £25 billion, so that 'bigger and better' schemes can drive down costs and invest in a wider range of assets. - Consolidating and professionalising the Local Government Pension Scheme, with assets merged into six 'pools' that can invest in infrastructure, housing and clean energy. - Allowing defined benefit (final salary) pension schemes to release surpluses totalling £160billion to support employers' investment plans and benefit scheme members. Chancellor Rachel Reeves says: 'The Bill is a game changer, delivering bigger pension pots for savers and driving £50billion of investment directly into the UK economy– putting more money into people's pockets through the Plan for Change.' Work and Pensions Secretary Liz Kendall says: 'Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners. 'The Bill is about securing better value for savers' pensions and driving long-term investment in British businesses to boost economic growth in our country.' Former Pensions Minister Steve Webb, a partner at pension consultancy LCP, says: 'Whilst there are many worthy measures in the Bill, the biggest omission is action to get more money flowing into pensions. 'The Government's own projections show that more than 12 million people are not saving enough for retirement and yet the first major pensions legislation of the new Parliament does nothing to address this 'elephant in the room'.' Webb, who is This is Money's retirement columnist, adds: 'The very fact that the adequacy of pension saving is not going to be considered until the second phase of the government's pensions review shows that this issue is unfortunately on the back burner. 'Measures such as consolidating tiny pension pots are helpful tidying up measures, but do nothing to tackle the fundamental problem that millions of us simply do not have enough money set aside for our retirement. 'With every passing year that this issue goes unaddressed, time is running out for people already well through their working life to have the chance for a decent retirement.' Yvonne Braun, director of policy for long term savings at pension industry body the Association of British Insurers, says: 'This wide-ranging Bill is set to usher in the most large-scale pension reforms since auto-enrolment. 'The details will be crucial and we will scrutinise the Bill to ensure it puts the interests of savers first. 'We also urgently need to tackle the level of pension contributions which are too low to create an adequate retirement income for many. We urge government to set out the details of its adequacy review as soon as possible.'
