XPS Group poll reveals over half of pension schemes in favour of Labour Government introducing tax incentives to increase pension investment in UK growth
XPS Group poll reveals over half of pension schemes in favour of Labour Government introducing tax incentives to increase pension investment in UK growth
23 Jul 2024
On Saturday the 20th of July, the UK Government announced a two-stage pension review with the first phase focusing on pension investment and the second on retirement security. This comes as an XPS Group poll of 320 pension scheme representatives who attended a webinar on the 18th of July revealed:
- Over half (56%) view new tax incentives as being the best way for the Government to drive pension investment in UK growth;
- Just under a third (30%) think the Government must improve the attractiveness of the UK investment market first in order to drive increased investment;
- 39% believe that mandating higher contributions is key to the Government improving retirement security;
- And finally, just over 1 in 5 (23%) support incentivising “sidecar”, or short-term savings alongside pensions, to enhance retirement security.
Sophia Singleton, Head of DC advisory at XPS Group said, “While the government’s review of DC investment in UK growth is welcome, policymakers must recognise the strengths of existing investment strategies. To invest more of DC savings in the UK, clear incentives and new opportunities will be needed. The second stage of the review will also be crucial. Improving the adequacy of savings not only bolsters retirement security but can also drive more pension investment in the UK economy.”
Wayne Segers, Partner at XPS Group added, “There is only passing mention of private DB pensions in the pension review. It is unlikely that trustees and employers of DB schemes will be persuaded by any Government to add significant investment risk given the hard-fought security achieved over the last 20 years. And the level of members’ benefits in DB does not directly depend on investment returns. Rather, the Government should progress changes to surplus rules, ideally as part of the announced Pension Schemes Bill. Previous XPS analysis showed that safely generating surplus can create £100bn of value for members and employers that in turn can help our economy.”
Click here to view XPS Survey ‘Running DB schemes on effectively’.