Rachel Reeves has said she does not believe the government will need to use its proposed reserve power over asset allocation due to widespread support for investing more in the UK.
Addressing representatives from the financial services sector at Mansion House in London last night, the chancellor reiterated recent statements from the pensions minister Torsten Bell that the reserve power – contained within the Pension Schemes Bill – would not ultimately be necessary.
“We have a duty to maximise the potential of people’s pension savings, and our bill reserves the power to mandate pension funds to invest productively in a wider range of assets, sending a clear signal that pension funds and this government are united in our determination to deliver higher returns for savers and more investment for the economy,” Reeves said.
“But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do.”
The chancellor highlighted the support for the Mansion House Accord, launched in May and backed by 17 major pension providers.
She also welcomed the Employer Pension Pledge, launched on Monday by Alastair King, the lord mayor of London.
Reeves added: “I am delighted to see businesses such as Tesco, First Group and Octopus making this commitment, and I look forward to seeing more companies joining up.”
Elsewhere in her speech, Reeves outlined plans to revamp risk warnings for financial products, with the goal of explaining risks and the benefits of investing in a more balanced way.
“For too long, we have presented investment in too negative a light – quick to warn people of the risks, without giving proper weight to the benefits,” the chancellor stated.
Reforms also include targeted support, which will allow pension providers to give more guidance to people approaching retirement to aid their decision-making.
