Spring Budget 2024

The Chancellor, Jeremy Hunt, delivered his Spring Budget on 6 March 2024. Alongside the abolishment of the Lifetime Allowance, the Pensions content was as expected from previous Treasury announcements. These built on the Mansion House proposals and Autumn Statement’s focus on creating better value for DC savings.

What are the Mansion House proposals?

On 10 July 2023, the Chancellor set out in a speech at Mansion House on the government’s progress in delivering an open, green, and technologically advanced financial services sector that is globally competitive, while retaining our commitment to high international standards.

Some of these initiatives are specifically pensions related as detailed below.

New requirements to disclose UK equities holdings

As part of the Mansion House proposal’s aim to unlock more pension fund capital, the Government intends to introduce requirements for DC schemes to publicly disclose the breakdown of their asset allocations, including UK equities.

The FCA is expected to consult in the spring, and equivalent requirements are expected soon after this. It is not yet clear when, or whether, these requirements will also be introduced for trust-based occupational DC schemes.

More details of the Value for Money (VFM) framework

With the outcome of the DWP, TPR and the FCA’s joint consultation on a new VFM framework published in July 2023, the Government is working with the FCA and TPR to develop the proposals. The framework aims to highlight where schemes are focusing on short-term cost savings at the expense of long-term investment outcomes, and where schemes’ current scale may be preventing them from offering value to savers.

In their consultation response, the parties made clear their plan to develop a suite of regulatory tools that will ensure schemes comply with the framework. The Budget provided a little more detail on this, announcing that these powers will include the ability to close a poorly performing scheme to new employer entrants or, where necessary, to wind it up. The FCA has previously confirmed its plans to consult on the framework in spring 2024.

Next steps

There are a number of developments still on the horizon, not least the FCA consultations due in the spring. We will update you when we have more information about the consultations and how they affect you.