Following the Chancellor’s Mansion House speech last night, industry experts have saved their thoughts on what they think this will mean for the UK going forward and have shared them with IFA Magazine.
Tom Selby, AJ Bell director of public policy, comments: “Rachel Reeves has placed the UK’s financial services sector front-and-centre of the government’s drive to power long-term growth. From creating pension ‘megafunds’ to a shake-up of the approach taken by regulators and reforms aimed at improving the help available to investors, the chancellor clearly wants to show she means business about turbo-charging the economy. It is certainly fair to say there has historically been a focus on the risks of investing for retail customers in UK regulation, often resulting in the potential long-term benefits being drowned out by risk warnings. Moving to a more balanced disclosure approach and making sensible reforms to the advice guidance boundary are both crucial to creating an investing culture in the UK – something which should ultimately help investors get better outcomes and boost UK plc too.
“Social media platforms are awash with questionable financial offers from bad actors and influencers duped into plugging sub-standard or fraudulent financial products. The FCA and ASA have already issued warnings against finfluencers pushing get rich quick schemes on social media, and a number of celebrity influencers have been interviewed under an FCA crackdown on finfluencers suspected of plugging financial products illegally. The chancellor has signalled that it isn’t just the individuals on social media platforms who need to take responsibility for this, however, with the social media companies themselves also being asked to demonstrate they’re making progress to tackle scams.
“When it comes to investing more of people’s pension pots in ‘productive’ assets in the UK, it is vital the long-term needs of savers are not sidelined. Ultimately, the main role of investing for retirement is to deliver good outcomes in retirement. In the government’s increasingly desperate search for investment and growth, it is crucial savers and retirees are not forced to pay the price through sub-standard investment returns.”
Giles Hutson, CEO, and co-founder of Insignis, commented: “The Chancellors’ highly anticipated pensions overhaul clearly has merits but will undoubtedly introduce further uncertainty into wealth planning and comes hot on the heels of the Budget and the Retirement Income Review.
“These reforms aim to channel private capital into Labour’s growth strategy, but individuals may be questioning how this shift will affect the growth of their own pensions. At times of fiscal change like this, maximising returns across all asset classes, including cash is key. By providing access to a broad range of savings products including cash in a Pension, Insignis is helping financial advisers and their clients make the most of their cash reserves, as they navigate these new uncertainties and reassess their long-term financial strategies.”
Jamie Jenkins, director of policy at Royal London said: “These reforms are intended to encourage higher levels of domestic investment, and create much greater scale, allowing more scope for pension funds to invest in longer-term assets. Delivered well, this could give rise to higher returns to pension savers and help grow the UK economy at the same time, which would be good for everyone.
“The Government has set out a plan to have fewer, larger pension schemes. While scale itself does not deliver better retirement outcomes for savers, there is evidence from comparable pension systems in Australia and Canada that there is a point of critical mass whereby it is easier to invest in longer-term, illiquid assets. This could give rise to greater returns, but also affords more capital for investment in vital infrastructure and growth areas of the economy.
“It is encouraging to see the level of detail in the consultation to fully unearth how scale operates at present, and whether this is achieved within the scheme or investment layer of the various pension propositions in the market.
‘The industry has become overly focused on the charges levied, despite the backstop of a regulatory charge cap. Pension propositions have evolved enormously since the introduction of automatic enrolment, so any shift away from price to a broader consideration of value is a welcome step.
“We welcome the changes to allow contract-based schemes to transfer funds without consent, provided the right safeguards are in place to protect the interests of customers. This will put contract-based schemes on a level playing field with trust-based schemes.
“It seems sensible to explore the merits of a duty on employers to consider the value provided by its workplace pension scheme, but care must be taken not to impose a disproportionate burden on smaller employers, who will not have the resources or skills to carry this out effectively.
“Royal London is delighted to be a founding member of the industry-led Mutuals Council, and we strongly welcome the Chancellor’s formal endorsement of its creation. As the UK’s largest mutual life, pensions and investment company, we look forward to working with the Government to help deliver its ambition to double the size of the sector and strengthen the mutual choice for UK consumers.”
Jason Paltrowitz, Director and EVP, Corporate Services at OTC Markets Group, comments: “While we welcome the positive noises, more must be done by the Chancellor to facilitate and unlock critical investment to support what is a creaking capital markets industry. Pension fund reform is one way to garner greater investment into UK equities, but maintaining a robust investor protection regime is critical, and will remain a core differentiator for the London Stock Exchange’s international competitiveness for US and global investors alike.
“The Chancellor must also continue her efforts to make the UK a more attractive place for investment, including by heeding calls to support tax reductions around stamp duty reserve tax, not just implementing this concession on PISCES. It is an obstacle to investment, and its removal would meaningfully improve the attractiveness of UK equities.
“And whilst PISCES continues to move forward, London’s listing markets need far more affection to effectively support the companies of tomorrow on exchanges like Aquis and AIM, which are vital to building up small venture stage companies and maintaining them as UK owned assets as they grow.”
Sam Hields, Partner at early-stage tech VC OpenOcean, said: “After a mixed-bag Budget, this speech will raise a number of question marks for the investment community. To her credit, Chancellor Reeves will have been locked in rooms with investors for months, trying to chart a course between ambition and realistic steps for growth. It remains to be seen, however, whether a world-first private stock market and new pension “megafunds” will actually open the door to billions in new investment for UK plc and infrastructure – or just add more hot air to the debate.
“Pisces, as an idea, raises a couple of interesting questions. First, there’s a concerning parallel with the era of SPAC-driven listings. In a more buoyant market, we saw companies fast-tracked to public markets with limited maturity—will Pisces have the mechanisms in place to avoid similar risks? On the upside, since Pisces isn’t open to the general public, this could provide a layer of control and limit exposure to speculative investments.
“Also, while there’s certainly value in trying to create a counterweight to the pull of deeper foreign markets, I’d question how much Pisces genuinely addresses the issues facing the London Stock Exchange (LSE). The National Insurance hike for employers in the Autumn Budget represents a far greater counterweight to growth and risk-taking for entrepreneurs. At the end of the day, it’s about incentives, and this might be one step forward after two steps back.
“Consolidating pension funds into “megafunds” might make them easier to interact with, but it doesn’t tackle the narrow mandate under which many UK pensions operate. Unlike US endowments like Yale, which have thrived by investing heavily in high-growth sectors, UK pensions remain fixated on blue-chip stocks, sidestepping opportunities in venture and innovation.
“To unlock genuine growth, we need more than economies of scale; we need a shift in mindset. High-margin sectors like fintech, AI, and data infrastructure offer substantial returns, and the UK is well-positioned in these fields. However, without flexibility in allocation, we risk sidelining transformative investments that could boost both the economy and pension outcomes.”
Gilbert Verdian, Founder and CEO at Quant says: “Westminster is under pressure to demonstrate its pro-growth credentials following the Autumn Budget, so it’s unsurprising to see tokenisation at the top of the agenda. The launch of digital gilts is an important step in cementing the UK’s leadership position in digital finance and can help futureproof our capital markets for the decades to come.“
“This announcement also comes at an interesting time from a geopolitical perspective. The UK’s financial services industry is uniquely positioned service institutions across both the US and the EU. To make the most of this opportunity, it is vital that we make our capital markets as attractive as possible to investors. Tokenised government bonds will be central to this mission by improving liquidity, helping to widen access to gilts and in turn making the debt-raising process easier and more efficient.”
Charles Damen, Chief Product Officer at Token.io comments: “As the leading account-to-account (A2A) payment infrastructure provider, Token.io welcomes the UK government’s National Payments Vision (NPV), which recognises the vital role of open banking in delivering seamless A2A payments that will drive competition and ensure consumers and businesses have a genuine choice of payment methods to meet their needs. We strongly agree there is a significant opportunity to further develop account-to-account payments in the UK in support of enabling greater choice in how consumers pay digitally for goods and services in shops and online.
“Therefore, we share the government’s ambition to establish A2A payments as a ubiquitous payment method, and applaud its decision to make unlocking open banking-enabled A2A payments for e-commerce a strategic short to medium term priority. As recognised in the Vision, other international markets – such as Brazil and Sweden – have clearly demonstrated the significant potential and innovation that can be realised from account-to-account payments.
By outlining a strategic direction for the UK payments landscape and guiding both regulatory and industry activity, the NPV promises to unlock open banking’s ability to spur innovation and competition in the provision of payments, while cementing the UK’s position as a global leader in payments. “In line with the Chancellor’s recent Mansion House Speech, we agree that the UK must continue to earn its status as a global financial centre through continuous innovation and adaptation within our highly competitive global landscape.”
Melanie Durrant, partner and public sector consulting actuary at Barnett Waddingham says: “Local Government Pension Schemes (LGPS) were holding their collective breaths for ‘the biggest reform in decades’ at the Mansion House speech, especially given the build-up from the early communications and Labour’s vocal ambitions for UK growth. Given that crescendo, the end result has been a bit underwhelming. In reality, the proposals are more of the same, but with a greater degree of enforcement of pooling. There is no merger of funds, and no mandate to invest a percent of those assets into the UK’s domestic markets. The ‘fit for the future’ consultation does add more bite to the Government’s proposals, and as a result the winners would appear to be the ‘built pools’ who are in line to get more assets to manage and greater decision-making powers. This is all the more reason to ensure pool governance is effective.”
Matt Tickle, Barnett Waddingham chief investment officer at professional services consultancy comments: “The Chancellor has pulled her punches when it comes to radical change to promote UK growth. Getting a few tens of billions of pounds from LGPS pools into UK infrastructure – which is still questionable unless the domestic investment element is mandated – wont actually move the dial on UK growth prospects. The magnifying glass needs to shift from the sources of investment to the destination. The UK planning and regulatory system continues to make infrastructure projects inefficient and unappealing to institutional investors; investing in reform of capital programmes and cutting red tape and uncertainty to business would improve investment prospects more effectively than just targeting pension assets “
“GDP has expanded by a measly 0.1% in the three months to September. While the Government can only do so much so fast, if it truly wishes to deliver the highest sustained growth in the G7 then it will need to take a far punchier and radical approach.”
Ian Mills, partner and Head of DB endgame strategy at Barnett Waddingham says, “The Mansion House speech was an enormous missed opportunity. If the Chancellor wants capital investment into the UK then the corporate DB pension sector is the obvious place to focus on. But all we got on this was silence.
“There are literally hundreds of billions of pounds sat in these pension schemes doing very little, and without reform this will simply be passed to the insurance sector. Instead, the Chancellor could have enabled these funds to be directly reinvested in British businesses by enabling scheme sponsors to access a fair share of it. Pensioners could have benefitted too, by allowing their share of it to be used to uplift pensions. Instead, it appears this will simply find its way to insurance company shareholders.
“The impact on the gilt market will, in the long run, be profound. UK DB schemes have supported government finances by buying vast quantities of gilts over the last twenty years or so. Without reform, these gilts will simply be dumped over the next decade or so, pushing up the interest cost for the taxpayer.”
Gary Delderfield, Partner and Head of Public Sector Pensions Group at Eversheds Sutherland, comments: “The chancellor’s inaugural Mansion House speech and the Interim Report point more towards the evolution of the LGPS rather than a wholescale revolution of the scheme. Many people were expecting the creation of new ‘mega-fund’ structures which has not materialised. It seems clear that government is focused on making LGPS funds invest at greater speed and in greater amounts into their existing pools and focus more on local investment. That said, within the detail there are many significant challenges ahead for both the LGPS and its pools if they are to meet the government’s expectations and timescales. It appears that some pools may be forced into restructuring their current operating models.”
Simon Kew, Head of Market Engagement at leading independent financial services consultancy Broadstone said: “It is encouraging to see true reform proposed by the Chancellor to initiate serious dialogue around unlocking investment into the UK for productive finance to drive sustainable economic growth. So long as members are protected and UK investment can be kick-started successfully, then the proposals should be approached positively.
“Along with measures to deliver better value for pension savers, a consultation on how the Government can best help people make better-informed financial decisions demonstrates a welcome desire to improve financial outcomes for households.”
David Piltz, CEO, Gallagher’s Benefits & HR Consulting Division in the UK, comments: “While the potential benefits of consolidation are widely acknowledged—such as the ability to negotiate lower fees and access more sophisticated investment strategies—we must consider the other side of the equation, too. The key challenge here is balancing consolidation with the risk of creating concentration. While pooling assets can certainly lead to efficiencies, too much consolidation could leave us vulnerable, with pension funds overly concentrated in just a few large investments. Do we want our pension system placing all its eggs in just a few baskets?
“Once schemes reach a critical size, the benefits of consolidation can taper off. A framework should be created in which investments have to fight for their place across a wide range of independent pension portfolios. This ensures price competition, better due diligence, and reduces the risk of overexposure to underperforming investments.
“The move towards Canadian-style pension reform – merging Britain’s local authority pension schemes into a consolidated pension fund – could drive down administrative costs and streamline operations. However, it’s worth noting that local authority schemes provide flexibility to match unique regional needs and risk tolerances. Centralising everything under a national fund could impose a one-size-fits-all model, which may not align with the goals of all local authorities or meet the needs of all beneficiaries. Overall, it does present an opportunity for greater returns, but it requires careful implementation to navigate the inherent challenges in such a major structural shift. “
Catherine Foot, Director of Phoenix Insights, said: “The Chancellor’s plans to invest in the industries of the future will play an important role in reducing economic inactivity and it is vital that it lays out a roadmap for transitioning to a net zero economy while ensuring workers are supported to move into greener jobs.
“Our recent findings highlight that workers aged 40-65 view green jobs as riskier than traditional roles, often due to concerns about pay and job security.
To bridge the UK’s green skills gap as part of Government’s new strategy, it is essential to provide better retraining opportunities and ensure that green jobs are advertised inclusively to attract experienced midlife and over-50s workers.
“This approach will not only support the transition to a greener economy but also ensure that experienced workers can contribute meaningfully to this fundamental sector.”
