Changes to proposed regulation and improvements in governance standards are urgently needed to ensure private sector defined benefit (DB) pension schemes remain an active and thriving part of the pensions landscape and work in the best interest of scheme members, MPs say today.
The Work and Pensions Committee report concludes that despite a steady decline in number in recent years, DB pension schemes are still of critical importance to both savers and the UK economy.
It warns however that two decades of regulatory and policy caution from DWP and The Pensions Regulator (TPR) have led to a low-risk approach to investment that threatens to inadvertently finish off the few remaining DB schemes still open to new members.
With an improvement in funding levels over the past decade presenting new challenges and opportunities for schemes, the report calls for a fresh approach both to funding regulation and the treatment of surpluses in pension and compensation schemes.
Among recommendations on the latter, the report calls for DWP and TPR to look at ways of ensuring the reasonable expectations of scheme members for benefit enhancement are met where there has been a history of discretionary increases.
On the new funding regime proposed by the Government to come into force in September, the Committee’s inquiry heard concerns that open schemes would be forced to de-risk unnecessarily, potentially leading to premature closure.
The Committee calls for the Government to address such concerns in the final version of the Funding Code and for TPR’s objective to protect the Pension Protection Fund to be replaced with a new duty to protect future, as well as past, service benefits.
PPF reserves now stand at £12 billion and the report calls for legislation to allow the levy to be reduced to zero and for compensation levels to be improved.
To encourage better governance, the Committee welcomes the introduction of a trustee register to improve TPR oversight. The report notes TPR’s view that consolidation, including through pension Superfunds, is one of the main ways to improve governance, and calls for the required legislation as soon as possible.
Rt Hon Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said:“Defined benefit pension schemes are hugely important to savers planning for a comfortable retirement and for the UK economy.
“The improvement in scheme funding levels presents opportunities for both to benefit, but a new approach to regulation and governance is needed to protect the best interest of scheme members and allow still open schemes to thrive.
“The flexibility afforded by the much-improved financial position of the PPF, which we applaud, gives the Government an opportunity to ensure open schemes are not hindered by overly cautious restrictions imposed by regulations.
“While many trustee boards operate to high standards, new standards for trustees can foster confidence that this is the case across DB schemes.”
The report follows up on some of the points raised during the Committee’s previous inquiry into DB pensions with Liability Driven Investments, which examined the events of autumn 2022. The Committee heard that a repeat of the events was now unlikely given the steps taken to improve resilience.
A full list of the Committee’s conclusions and recommendations is available on Pp 54–58 of the report.
Pension funds to publicly disclosure how much they invest in UK businesses Vs those overseas.
Schemes performing poorly for savers won’t be allowed to take on new business from employers.
Changes are part of the government’s plan to improve outcomes for savers and consolidate the pensions market.
The Chancellor has today (2 March) announced pension fund reforms as a further step in the government’s plan to boost British business and increase returns for savers. This includes requirements for Defined Contribution (DC) pension funds to publicly disclosure their level of investment in the UK.
The government’s auto enrolment rollout has driven a huge growth in the amount of investment entering UK pension funds, from less than £90 billion in 2012 to around £116 billion in 2022. However, the disclosure requirements for DC pension funds are currently inconsistent across the market and do not require a breakdown of UK investments, sometimes making it difficult for policymakers and savers to understand where this money is invested.
By ensuring pension funds publicly disclose where they invest and the returns they offer, it will make it possible for employers and savers to compare schemes and make informed choices. The government is embarking on Value for Money (VFM) pension fund reforms to improve outcomes for savers and consolidate the DC pensions market. The reforms will ensure that pension managers are focused on securing good returns for savers.
Under the plans:
By 2027 DC pension funds across the market will disclose their levels of investment in British businesses, as well as their costs and net investment returns.
Pension funds will be required to publicly compare their performance data against competitor schemes, including at least two schemes managing at least £10 billion in assets.
Schemes performing poorly for savers won’t be allowed to take on new business from employers, with The Pensions Regulator (TPR) and Financial Conduct Authority (FCA) having a full range of intervention powers.
The plans are subject to a consultation by the Financial Conduct Authority and build on the Government’s Mansion House compact, that encouraged pension funds to invest at least 5% of their assets in unlisted equity.
Chancellor Jeremy Hunt said: “We have already started on a path to drive growth, unlock capital for our most promising companies and improve outcomes for savers – and these new rules mean employers and savers can see how their money is invested and how the returns compare to other schemes.
“British pension funds appear to contribute less to the UK economy than international counterparts do as they invest less in our domestic businesses. These requirements will help focus minds on how to improve overall returns and outcomes for savers.”
Secretary of State for Work and Pensions, Mel Stride MP, said: “The incredible success of automatic enrolment has opened up a huge opportunity to grow the economy, boost British businesses and fuel our futures. It has helped us transform the pensions landscape over the last decade.
“And our Value for Money framework will take this one step further, focusing pension managers on their number one priority – securing the best possible returns for savers – as well as providing a boost to the wider economy.”
Julia Hoggett, CEO of London Stock Exchange plc and Chair of the Capital Markets Industry Taskforce, said:“Pension holders should know how much is being invested in equities in their home market.
“Investing in UK companies ultimately benefits those companies and the returns they are delivering, which supports the economy and the country in which pension holders live, to everyone’s benefit and in everyone’s interest.”
James Ashton, Quoted Companies Alliance chief executive, said:“There is huge upside to aligning the UK’s financial assets with innovative homegrown ventures that could be tomorrow’s world beaters.
“We welcome these new disclosures and hope they are the first step to many UK pension funds discovering the numerous high-potential companies whose shares are traded on their doorstep.”
Chris Hayward, Policy Chairman of the City of London Corporation, said: “The Mansion House Compact aims to channel long-term capital from pension funds into growth companies.
“It will support high-growth companies to start, scale and stay in the UK. We welcome the Government’s action to support this objective which will turn the dial to drive investment into UK businesses. It is vital that the pension ecosystem focusses on value for money and long-term returns for savers.”
Recent reports state that UK households are to face a forecasted 11% increase in credit card and loan debt in 2024, as well as warnings of a £17,600 debt surge by 2026.
In a recent study by CityIndex, UK households are saving just 3.25% of their disposable income amid the soaring cost of living crisis – a figure that is expected to change if debt levels reach their predicted peak.
The study analysed global data on household savings, including mean disposable income, mean household savings and long-term interest rates, to ultimately discover the countries with the highest household savings in the world.
Key findings:
UK households save an average of 3.25% of their earnings per annum.
Households in the United Kingdom make almost as much as those in Sweden, but they get to save three times less
Switzerland leads the rating with a total savings score of 9.83/10, and the lowest mean long-term interest rates
Sweden stands out for lower than average long-term interest rates
The countries with the highest household savings:
County
Mean household disposable income in USD*
Mean household savings in USD from disposable income*
% of disposable income put toward savings
Mean long-term interest rates
Total savings score
1.
Switzerland
$35,311
$5908
17%
1.44
9.83
2.
Luxembourg
$40,395
$3028
8%
2.35
9.69
3.
United States of America
$42,592
$2961
7%
3.21
9.67
4.
Chile
$14,004
$1532
11%
5.19
9.63
5.
Germany
$32,997
$3568
11%
2.28
9.62
6.
Austria
$31,792
$3058
10%
2.61
9.55
7.
Netherlands
$31,304
$2475
8%
2.47
9.51
8.
France
$29,663
$2876
10%
2.62
9.49
9.
Belgium
$29,837
$2778
9%
2.75
9.48
10.
Sweden
$28,611
$2814
10%
2.55
9.47
17.
United Kingdom
$28,222
$918
3.25%
3
9.26
Data is calculated between 2000-2022. *Mean household disposable income & savings are calculated per annum. Exchange rates may have an impact on the final rankings; for clarification, see the methodology.
The United Kingdom ranked 17th out of the 35 countries analyzed. While UK households have a mean household disposable income of $28,222 (£22,956), which is not far from Sweden, which made it into the top 10, only a mere 3.25% is put towards their savings.
Amid the ongoing cost of living crisis, essential expenses like housing, utilities, and groceries are dwindling the funds available for savings.
With food prices experiencing their most rapid increase in the last 45 years and utility bills soaring, households find themselves with limited support, unsurprisingly resulting in scarily low savings rates. Furthermore, the substantial debt obligations, encompassing loans and mortgages, absorb a significant portion of the income of UK residents, especially now when mortgage rates have peaked.
Top 3 Countries With The Highest Savings Per Household
Switzerland residents have the highest household savings with a total savings score of 9.83 out of 10. Households in Switzerland save 17% of their gross income, with $5,908 per year saved on average between 2000-2022. This is 48% higher than the neighbouring country of Austria ($3,058) in the same time period, despite having a similar population size. Switzerland also has the lowest long-term interest rates at 1.44 since 2000 — 63% lower than the long-term interest rates in Luxembourg (2.345).
Luxembourg ranks second with a total savings score of 9.69/10. The country has the second-highest household disposable income between 2000-2022 ($40,398), 35% higher than in the neighbouring country of Belgium ($29,837). Luxembourg residents have mean household savings of $3,028, with 8% of their disposable income put toward savings. Not only this, Luxembourg’s long-term interest rates stand at 2.35, which are the third lowest interest rates globally behind Switzerland (1.44) and Germany (2.28).
The US ranks 3rd, with a total savings score of 9.67 out of 10. With the dollar exchange rate taken into account, the USA has the highest mean household disposable income in the ranking ($42,592), 45% higher than Canada ($29,442) and 3 times higher than Mexico ($14,102). CityIndex found that American residents have a mean average household savings of $2,961, with 7% of their disposable income going into their savings.
Other countries with notable savings findings
Chile ranks fourth with a total savings score of 9.63 out of 10. Chile has one of the highest long-term interest rates (5.19) and the lowest mean disposable income at $14,004. Despite this, Chile residents manage to put 11% of their disposable income towards their savings — 3% more than Luxembourg in second place — equating to $1,532 in mean household savings.
Germany, which ranks 5th, was found to have the second highest mean household savings ($3,568), 21% higher than in the neighbouring country of France ($2,876).Not only this, but the country has the fourth lowest long-term interest rates on the list (2.28), 19% lower than in Belgium (2.75).
Sweden stands out for lower than average long-term interest rates. The country ranks 10th, with a total savings score of 9.47 out of 10. Swedish households have a mean household disposable income of $28,611, over double that of Poland ($16,736), putting 10% of this toward their savings on average.
Sweden has a lower-than-average long-term interest rate compared to other countries in the ranking (2.55) along with impressive mean household savings ($2,814), 12 times more than Finland ($242).
Majority of those that will be saving less blame the increased cost of consumer staples and rising energy prices
Young adults aged 34 and under are four times more likely to be saving more in 2024, compared to over 55s
One in five (19%) adults in the UK say they’ll be saving less money in 2024, new independent research* carried out on behalf of Handelsbanken Wealth & Asset Management shows.
For those planning to save less next year, almost two thirds (64%) said this was down to increased energy prices while the same proportion (63%) blamed the increased costs of consumer staples, such as food and other household goods. Over half (57%) agreed that high inflation was a factor too, according to the study.
This is further supported by recent data from the Office for National Statistics (ONS)**, which found that around 4 in 10 (41%) of energy bill payers are struggling to afford payments, and revealed that just under half (48%) of adults in Great Britain are using less fuel, such as gas or electricity, in their homes because of the rising cost of living.
While 30% of British adults say their intentions are to save more next year, many are doing so to prepare for tough times in the future. More than a quarter (28%) believe they’ll need a savings ‘safety net’ due to the rising cost of living, for instance – with more women planning for this than men (32% vs. 24%). This is unsurprising, with ONS data revealing that around three in 10 (30%) were already having to dip into existing savings to meet rising costs.
The Handelsbanken data shows it is younger people who are most likely to be saving next year, with those aged 18-34 four times more likely (57%) to in 2024, compared with those over 55, at just 14%. Of those that are planning to save more, around one in five said this is because they’ll be starting a job which pays more.
PK Patel, Head of Wealth Management at Handelsbanken Wealth & Asset Management said: “With many feeling the strain after months of increased prices and increased outgoings, it’s no surprise that people are less than optimistic when it comes to augmenting their savings or maintaining their existing pots.
“But while dipping into your nest egg or saving less than usual is sometimes unavoidable, it can have lasting consequences on your long-term financial planning goals.
“It is therefore more important than ever to seek financial advice to ensure you’re putting the best plan for yourself in place, and keeping an eye on key upcoming personal finance dates, such as the ISA deadline on the 5th April.
“This is the final date you must pay into your ISA to take advantage of that financial year’s tax benefits, for instance, and a significant event in the savings calendar.”
Brits have on average £24,500 in savings account, after putting away £260 every month
UK savers say that their average interest rate is 3.3%, 1.95% below the Bank of England’s rate
Despite this, only 23% of savers have switched accounts in the last year to capitalise on better interest rates
7 out of 10 brits (71%) feel that banks profits are too high
Smart money app Plum is calling out banks for profiteering from high interest rates and not passing interest back onto savers.
Despite recent hikes in the Bank of England’s base interest rate, which currently stands at 5.25%, many UK banks have been slow to adjust their savings account rates accordingly. This has left consumers feeling short changed and struggling to make the most of their money.
New research from Plum shows that the average UK saver is putting away £260 in savings each month, with a total of £24,500 in their savings accounts. In addition, the research found that the average Brit is getting 3.3% interest on their savings account, 1.95% under the base rate. This means that on average, customers are losing out on £478 in interest per year1, equating to a hefty £17 billion across UK savers2.
Despite savers being able to gain higher interest rates by switching, the majority of savers (77%) hadn’t done this. They cited similar rates between banks (28%) and liking their current banks (30%) as the biggest barriers, even though 71% of people felt that banks profits were too high.
The biggest motivator for saving was for an emergency fund (49%), with holidays coming in second (44%). Saving up to buy a house or for home improvements was the biggest motivator for people under 45 (47%) and for the 55-64 age bracket, saving for retirement was their biggest priority (51%).
In July this year, the FCA set out a 14-point action plan to ensure banks and building societies are passing on interest rate rises to savers appropriately, with those that fail to justify their pricing decisions by the end of 2023 set to face robust action from the FCA.
Victor Trokoudes, Founder and CEO of Plum, said: “While banks have been quick to increase interest rates on loans and mortgages, they have been sluggish in boosting interest rates on savings accounts.
“We are in the midst of a cost-of-living-crisis and consumers are continuing to face financial pressures. So it’s really disappointing to see that many banks are not passing more of this money back onto customers, effectively devaluing their hard earned savings.
“While the FCA has pledged to take action against this behaviour by the end of 2023, it’s by no means a silver bullet. Borrowers are paying more while savers see minimal benefits, highlighting that the business models of the major banks are inherently misaligned with the interests of their customers.
“The Bank of England has raised rates 14 times since December 2021, and they are expected to remain high. That’s why it’s so important that the public know that they don’t need to stand for this and allow banks to take their deposits for granted. We’ll be offering a new service that better reflects these base rate changes so their money can work harder.”
Plum, which has already helped people to set aside £2bn, is launching a new product that allows people to earn higher returns that are more closely aligned to the Bank of England base rate
Police Scotland has outlined urgent action to maintain effective policing within the funding available to the organisation.
Policing’s funding allocation for 2023-24 represents a real terms reduction, meaning more than £50m of savings are required to ensure a balanced budget.
Police Scotland has been clear hard choices are necessary and we have been required to reduce our budgeted officer establishment from 17,234 to 16,600.
Deputy Chief Constable Designate Fiona Taylor QPM provided an overview of work to prioritise resources to keep people safe and protect the vulnerable and was clear our service to the public will be impacted.
DCCD Taylor said: “Our financial planning in March made it clear that our funding allocation for 2023-24 represents a real terms reduction, meaning we have been required to reduce the number of police officers we have from 17,234 to around 16,600.
“Of necessity, we will reduce police staff costs in proportion to the reduction in officer numbers and reduce overtime spending.
“Hard choices are being taken now to maintain effective policing within the funding available to us. Action is being taken to achieve savings and deliver a balanced budget for 2023-24. Areas which encounter the greatest demand and which carry the greatest risk are being prioritised to ensure we continue to effectively reduce harm and protect the vulnerable.
“As part of this urgent action we have paused police staff recruitment other than for reform or externally funded posts; for roles based in our Contact, Command and Control (C3) Division or Resource Deployment Unit; for Police Custody and Security Officers; and for Public Enquiry and Support Assistants.
“Recruitment of Probationary Constables will continue and our commitment to no compulsory redundancies for police staff remains.”
DCCD Taylor also said funding challenges underlined the need to accelerate changes which made savings or supported operational policing, including the successful transformation of the police estate.
DCC Taylor said: “This work will shape our Service and define core policing. It seeks to reduce demand and increase capacity, and accelerate those changes which save money and provide benefits to operational policing. This includes the ongoing transformation of our estate. We will also review support services and our command structures.
“Consequently, some of the things that we do may need to be done differently or take us longer. The level of service we provide in some areas will reduce.”
Police Scotland returns more than £200m to the public purse every year compared to legacy arrangements.
The Scottish Government’s budget for 2023/24 confirmed an £80m core funding uplift for policing, with £37m required to fund the ongoing cost of the 2022-23 pay award, leaving £43m to fund unavoidable pay and other inflationary costs for the current financial year.
Chancellor outlines reforms to boost pensions and increase investment in British businesses
the ‘Mansion House Reforms’ could unlock an additional £75 billion for high growth businesses, while reforms to defined contribution pension schemes will increase a typical earner’s pension pot by 12% over the course of a career
comprehensive reforms will increase pension pots by as much as £16,000
The reforms will also unlock up to £75 billion of additional investment from defined contribution and local government pensions, supporting the Prime Minister’s priority of growing the economy, and delivering tangible benefits to pensions savers.
The United Kingdom has the largest pension market in Europe, worth over £2.5 trillion. Over the past ten years Automatic Enrolment has helped an extra ten million people save for their futures, with £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’s largest Defined Contribution pension providers, committing them to the objective of allocating 5% of assets in their default funds to unlisted equities by 2030. These providers represent over £400 billion in assets and the majority of the UK’s Defined Contribution workplace pensions market.
This could unlock up to £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’ pension pots by up to 12%, or as much as £16,000 for an average earner.
Chancellor of the Exchequer Jeremy Hunt said:“British pensioners should benefit from British business success. By unlocking investment, we will boost retirement income by over £1,000 a year for typical earner over the course of their career.
“This also means more investment in our most promising companies, driving growth in the UK.”
Secretary of State for Work and Pensions Mel Stride said:“British workers should have the confidence that their pension savings are working as hard as they are.
“Our reforms will benefit savers and society – 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.”
The Chancellor’s 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 £10,000 could have notionally lost £5,000 over a 5-year period from being in a lowest performing scheme.
The Mansion House Reforms will be guided by the Chancellor’s 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’s 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’s skills and expertise.
This will complement the £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.
The 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 £25 billion by 2030. The 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 £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’ interests and protecting the sound functioning and effectiveness of the gilt market.
Capital Markets
The UK has the largest stock market in Europe and one of the deepest in the world – 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’s UK Listing Review, replacing the EU’s outdated regime.
Firm’s 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. The 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.
The government has also accepted all of Rachel Kent’s Research Review published today, paving the way for a new ‘Research Platform’ that will provide a one-stop-shop for firms looking for research experts. It also sets the path for potentially removing the unbundling rules – an inherited EU law that requires brokers to charge a separate fee for research.
The 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 ‘Intermittent Trading Venue’ 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’s Edinburgh Reforms and Solvency II reforms which will unlock over £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’s 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’s regulatory rulebook.
The 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.
The 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
The Mansion House Compact members are: Aviva; Scottish Widows; L&G; Aegon; Phoenix; Nest; Smart Pension; M&G; Mercer.
The package of reforms announced yesterday could help increase pension pots for an average earner who starts saving at 18 by 12% over their career – over £1,000 more a year in retirement – 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 £10,000 could have notionally lost £5,000 over a 5-year period from being in a lowest performing scheme.
Reaction to the Chancellor’s Mansion House Reforms
Jamie Dimon, Chairman & CEO, JPMorgan Chase said:“Great financial centers stay competitive by responding to the market and evolving through the kinds of important iterations that the Chancellor has announced.
“It’s 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.”
Sir Jon Symonds CBE, Chair, GSK said:“I welcome these important reforms which will further strengthen the UK capital markets and support economic growth.
“The 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’s most innovative companies are better supported by UK capital to stay in this country as they scale to maturity.”
Brent Hoberman, Executive Chairman & Co-Founder, Founders Forum, Founders Factory said:“The planned pension reforms will enable for capital to be productively invested in funds and scaleup companies in the UK.
“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.
“The reforms will enable the UK to build on the positive momentum in these key parts of the economy drive further synergies between it’s world class financial institutions and entrepreneurial base.”
C. S. Venkatakrishnan, Group Chief Executive, Barclays said:“The UK has needed a bold, forward-looking policy agenda and industrial strategy to grow the economy.
“These Mansion House Reforms are an important step in the right direction in mobilising private capital to support growth and innovation.”
Irene Graham OBE, CEO, ScaleUp Institute said:“The package of measures announced by the Chancellor today are very much welcomed by the ScaleUp Institute.
“They contain significant and innovative solutions which will help to enable easier and simpler access to capital markets and patient growth capital. These 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.”
Miles Celic, Chief Executive Officer, TheCityUK, said: ““The competitiveness and attractiveness of any successful international financial centre must, by definition, always be a work in progress. The Chancellor is right to be ambitious in building on the UK’s successes and recognising that we can’t afford to be complacent.
“The Mansion House Reforms are ambitious, pragmatic and necessary. They will underpin the UK industry’s 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.”
Chris Hulatt, Co-Founder, Octopus Group said: ““We welcome government’s 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.
“Finding 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.”
Noel Quinn, Group Chief Executive, HSBC said:“I welcome the strong and comprehensive package of measures announced by the Chancellor in his Mansion House speech.
“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.”
Lord Mayor, Nicholas Lyons said: ““These 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.
“I’m proud to have convened key industry players to make this commitment to unlock £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.”
Tim Orton, Chief Investment Officer, Aegon UK said: ““Aegon 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. The Compact will also create opportunities that help deliver our climate targets as we progress towards net zero.”
Sir Nigel Wilson, Group CEO, Legal & General said:“As the UK’s 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.”
Mark Fawcett, CEO, Nest Invest said:““For many years now, illiquid assets have been integral to diversified DC pension schemes around the world.
” It’s been a key driver behind Nest setting up our own private market mandates to ensure our members aren’t 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.”
Ruston Smith, Chair, Smart said: ““Smart 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’s technology sector, helping home-grown start-ups and scale-ups to flourish and thrive.”
Scottish Widows, CEO, Chirantan Barua said: ““The industry needs to modernise the investment options available to customers.
“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’m proud that Scottish Widows is a founding signatory of the Mansion House Compact.”
Phil Parkinson, Investments and Retirement Leader, Mercer said:“Mercer 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’ portfolios from a risk and a return perspective and are in favour of initiatives designed to unlock this asset class for DC members.”
Edward Braham, Chair, M&G said:“Patient capital put to work in companies or projects over multiple decades is essential to support economic growth and importantly, capture value for people’s pensions as they save for their retirement.
“M&G’s 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.”
Mike Eakins, Chief Investment Officer, Phoenix Group said:““We 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 £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.”
Dobbies, the UK’s leading garden centre, is giving customers a helping hand with value restaurant offers in its Edinburgh store.
Customers in Edinburgh can recharge and relax in Dobbies’ restaurant. Whether catching up with friends or spending time with the family, the Dobbies’ team will be on hand, serving hearty breakfasts, lunches and delicious sweet treats throughout the day. Dobbies’ restaurant also offers a dog-friendly area.
Hearty breakfasts for under £5
Kick start the morning and enjoy the most important meal of the day at Dobbies. Customers can order a three-item breakfast roll for just £4.25 and a five-item breakfast for £4.50. Quality produce is at the heart of Dobbies’ breakfasts with succulent pork sausages, thick cut back bacon and free-range eggs. There’s also a vegetarian choice for an alternative breakfast option.
Effortless lunches
Choose from a wide selection of lunch options, including light seasonal dishes such as hearty soups, jacket potatoes and handmade sandwiches or toasties from £4.95, served from 11:30am until 3pm.
Main courses can also be enjoyed daily from 12noon until 3pm. Popular dishes include Dobbies’ sustainable haddock dipped in a gluten-free batter served with chips, peas and tartare sauce, classic lasagne or chicken Caesar salad.
Customers over 60 can tuck into a main meal and a cake for just £9.95, Monday-Friday from 12noon.
Delicious sweet treats
Indulge in a sweet treat at Dobbies and take advantage of this delicious deal. Customers can treat themselves to a traditional or vegetarian Afternoon Tea for two experience for £20 and enjoy a selection of finger sandwiches, mini cakes and slices, freshly made plain and fruit scones with jam and clotted cream, plus a pot of tea or coffee is included.
Afternoon Tea should be booked online, in advance, at dobbies.com.
If you’re looking for a light afternoon bite, Dobbies’ two for one offer on scones is priced at £3.75 and is available from 2pm.
Kids Eat Free
Dobbies’ Kids Eat Free offer runs through the day, allowing children under the age of 16 to enjoy their food for free with every traditional adult breakfast and main course meal at lunch. This includes kids’ breakfasts, lunch menu or a pick ‘n’ mix meal, plus a drink.
Adam Veysey, Dobbies Development Chef, said: “We’re committed to offering great tasting and great value meals in our Edinburgh restaurant.
“We’re very aware that people will be controlling their spend this January, so we’ve ensured we’re offering our customers the chance to enjoy eating out for less. With seasonal produce and customer favourites, we have something for all the family.”
Tens of thousands of teenagers in the UK who have not yet claimed their matured Child Trust Funds savings could have thousands of pounds waiting for them, reminds HM Revenue and Customs (HMRC).
Child Trust Funds are long-term savings accounts set up for every child born between 1 September 2002 and 2 January 2011. To encourage future saving and start the account, the government provided an initial deposit of at least £250.
The savings accounts mature when the child turns 18 years old. Eligible teenagers, who are aged 18 or over and have yet to access their Child Trust Fund account, could have savings waiting for them worth an average of £2,100.
If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact them directly. This might be a bank, building society or other savings provider.
Many eligible teenagers who have yet to claim their savings might be starting university, apprenticeships or their first job. The lump-sum amount could offer a financial boost at a time when they need it most.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:“Teenagers could have a pot of money waiting for them worth thousands of pounds and not even realise it.
“We want to help you access your savings and the money you’re entitled to. To find out more search ‘Child Trust Fund’ on GOV.UK.”
An estimated 6.3 million Child Trust Fund accounts were set up throughout the duration of the scheme, containing about £9 billion. If a parent or guardian was not able to set up an account for their child, HMRC opened a savings account on the child’s behalf.
Teenagers aged 16 or over can take control of their own Child Trust Fund if they wish, although the funds can only be withdrawn once they turn 18 years old.
Where children have a Child Trust Fund, families can still pay in up to £9,000 a year tax-free. The account matures once the child turns 18 years old and no further money can be deposited. They can either withdraw the funds from the matured Child Trust Fund account or reinvest it into another savings account.
Until the child withdraws or transfers the money, it stays in an account that no-one else has access to.
The average working household has £2,400 in savings – the equivalent of less than a month’s worth of basic expenses
Over half of all savers say they will fall back on their rainy-day funds to meet rising living costs
Working families estimate they need £12,100 in the bank to feel financially secure but less than a third of households have this set aside
It would take the average household three years to put aside the desired financial safety net
One in four working households with savings (28%) have started dipping into them to meet rising living costs, according to a report from Legal & General. A further 30% anticipate they will need to do so in the next year.
With consumer prices 10.1% higher in July 2022 than a year before2, and with annual household energy costs set to rise to an average £2,500 in October 20223, many households will likely have to rely even more on the money they have tucked away. This could see household savings built up during the pandemic lost.
The average working household currently has £2,400 in savings. However, this equates to less than a month of basic expenditure for the average family, if they lost their income and were pushed to rely on their savings.
Financial security under threat
To feel financially secure, households estimate they need £12,100, or nearly five months worth of basic household expenses, set aside. However, only three in 10 working households (30%) have this set aside, and pressure to dip into savings will likely see this number fall.
Based on current savings patterns, with the average working household saving just over £300 a month, it would take three years to reach the desired financial safety net, and nine years to put aside a year’s worth of essential spending. However two-thirds (64%) of all households that currently save have either already decreased or stopped their savings habit altogether (31%), or expect to have to do so (34%), due to increased living costs.
No safety net for some
There is also a growing number of people who cannot put aside any money; nearly 1.9 million households have no money left at the end of the month, an increase of 330,000 since 2020.
This is likely why 16% of households have no savings at all in case of emergency.
“With the cost of basic essentials on the rise many households will find themselves having to make difficult choices and dipping into savings is likely to become more common. This is a far cry from the five-month financial safety net that people hope for”, said Bernie Hickman, CEO, Legal & General Retail.
“It can be concerning for people to feel like they have nothing to fall back on in times of difficulty. While dipping into savings is inevitable for some, there are also steps people can take to try to control their costs as much as possible by checking their regular outgoings and subscriptions, shopping around for discounts and deals and by making sure they are taking up free financial guidance services like MoneyHelper.
“To help people better understand their money and make informed decisions, we have put together a financial safety net content hub to help people find free tools and resources.”
