Annabelle Hardiman comments on the Spring Budget

Commenting on today’s Spring Budget, Annabelle Hardiman, Trustee Director and Head of PCST said:

“Today’s Spring Budget reaffirmed the Government’s priorities for the industry and the UK economy at large, with pension schemes and other savings vehicles very much at the heart of Government’s desire to attract investment into the UK.

Most surprising was the Chancellor’s subtle shift on what value for money means in the context of DC schemes. Whilst the Government’s 2023 consultation on the value for money framework focuses on investment performance “net of all costs and charges, including transaction costs and performance-based fees”, the Chancellor today promised new powers for TPR and FCA “to ensure better value from DC schemes, by judging performance on overall returns not cost.” Whilst costs should certainly not be the sole factor in deciding how and where to invest, a focus on returns at the expense of cost is surely not in the members’ best interest either. The Chancellor also remains committed to building on the Edinburgh and Mansions House reforms to “unlock more pension fund capital” for investment in productive assets, with both DB and DC schemes central to achieving this.

We agree with the Chancellor’s intentions to generate long term growth within the UK, for the benefit of individual savers, the companies supporting their pension schemes, and the economy as a whole. A holistic approach must be taken to pension reforms, however, and we look forward to considering further with the Government and the pensions industry how that might be achieved in a sustainable way.”

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