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Spring Budget 2024 brings no big surprises to pensions

Spring Budget 2024 brings no big surprises to pensions

07 Mar 2024

What you need to know

  • The Chancellor’s Spring Budget delivered on 6 March 2024 had limited new pension items. The Pensions content was as expected from previous Treasury announcements and built on the Mansion House proposals and Autumn Statement’s focus on creating better value for DC savings.
  • As was announced on 2 March, the Chancellor confirmed new disclosure requirements for DC schemes, and the objective to strengthen powers for The Pensions Regulator (TPR) and Financial Conduct Authority (FCA) to intervene in underperforming DC schemes.

Actions you can take

  • Consider the impact of the further DC proposals on the management and administration of your DC funds.

Summary of key Budget updates on pension proposals

Item Affects Description
DC Will bring forward requirements for DC pension funds to publicly disclose the breakdown of their asset allocations, including UK equities.
Value for Money (VFM) requirements DC Signal given that schemes will be required to compare their performance, costs and other metrics against those of at least two schemes managing over £10 billion in assets, increasing significantly over time. The Government will work closely with the FCA to bring this into force.
New regulatory powers DC As part of the upcoming VFM pensions framework, full powers will be provided to TPR and FCA to use where schemes persistently give ‘poor outcomes’ to savers, including closing a scheme to new entrants or winding up a scheme.
Timing DC Disclosure and VFM items expected to be covered in FCA consultation over spring. The Government will look to legislate at the earliest opportunity to apply the VFM framework and provide TPR with new powers, ensuring key disclosures are in place by 2027.
Lifetime provider model DC Confirmed commitment to exploring this for DC pensions in the long term.

New investment opportunities

DC As part of proposals for the British Business Bank (BBB) to support DC investment in growth, the organisations that will participate in the Long-Term Investment for Technology and Science (LIFTS) funds were announced.
Maintain triple
Commitment to maintaining the triple lock was confirmed.

For further information, please get in touch with Charles Smith or speak to your usual XPS Pensions contact.

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