Latest news with #pension reforms
Yahoo
2 days ago
- Business
- Yahoo
ICAEW urges Chancellor to prioritise pension reforms for economic growth
The Institute of Chartered Accountants in England and Wales (ICAEW) has urged the UK's Chancellor of the Exchequer Rachel Reeves to prioritise pension reforms to unlock the £3trn ($4.04trn) potential held by pension funds. Ahead of the Chancellor's Mansion House speech this week, ICAEW emphasised the significant economic impact of these funds compared to the relatively minor £300bn held in cash Individual Savings Accounts (ISAs). ICAEW highlighted that focusing on cash ISAs would not significantly contribute to economic growth. The institute welcomed the shift away from this focus but stressed that any reserve powers to mandate asset allocation should include strict transparency, oversight, and safeguards to mitigate risks, especially in higher-risk or less liquid asset classes. ICAEW chief executive Alan Vallance said: 'A year after the general election, growth remains the government's most pressing mission and we hope the Chancellor will use her Mansion House speech as an opportunity to reduce the regulatory burden on financial services. 'In our view, a change to cash ISAs would have been misplaced, and instead a focus on improving conditions for the much greater funds held by institutions would yield the most benefit to UK plc. 'Cash deposits by individual savers support mortgage lending, and a limit to that supply would raise the cost of capital for building societies, resulting in higher mortgage rates and higher inflation.' ICAEW also pointed out that the current regulatory burden is hindering innovation and growth. It called for more proportionate, transparent, and forward-looking regulatory regimes to boost the economy. This includes implementing the reformed UK prospectus regime to streamline capital access and increasing private capital mobilisation with appropriate protections. ICAEW expects the government's upcoming financial services sector plan to outline concrete steps to reduce regulatory costs for businesses by 25%. The plan should also address inefficiencies, eliminate duplication, and streamline data collection to enhance competition in UK capital markets, thereby encouraging listings and risk-taking. Vallance added: 'Meanwhile, a concrete plan to cut the cost of red tape by a quarter and to ensure regulation is proportionate, transparent and forward-looking will help reduce the burden on business. 'It is vital that the Chancellor uses her speech on Tuesday to outline measures to boost flows from both institutional and private investors back into the UK's capital markets and remind global business why London is the world's top financial centre.' The institute stressed the importance of supporting the repositioning of AIM as a growth market. In addition, ICAEW emphasised that the assurance of information supporting capital markets must evolve to maintain investor confidence with trusted and reliable information. Earlier in July 2025, ICAEW's Business Confidence Monitor for Q2 2025 revealed that the business confidence index in the UK dropped to -4.2, its lowest since Q4 2022. "ICAEW urges Chancellor to prioritise pension reforms for economic growth " was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
2 days ago
- Business
- Telegraph
Reeves warned pension reforms are ‘nail in coffin' for struggling businesses
Rachel Reeves has been warned that reforms to private pensions will be a 'nail in the coffin' for struggling businesses. The Chancellor is expected to announce a new review of the private pension sector in her Mansion House speech this week, which could result in employers being forced to pay more towards the pensions of auto-enrolled workers. The Government is concerned about the long-term stability of the state pension, which the Office for Budget Responsibility warned on Wednesday would become far more expensive by 2030 because of the triple lock. Leading business groups told The Telegraph that requiring employers to pay more towards their workers' pensions would damage already-struggling firms, who endured a hike in National Insurance contributions under Ms Reeves' last Budget. Employees who are auto-enrolled in workplace pension schemes currently contribute five per cent of their salary, pre-tax, while employers pay three per cent. A review by the Department of Work and Pensions (DWP) could conclude that businesses should pay more to help their workers in old age. There has also been speculation that employers will be asked to pay National Insurance on the pension contributions they make, which would hike costs further. Craig Beaumont, the executive director of the Federation of Small Businesses, told The Telegraph the reforms would have a disastrous effect for firms already struggling to stay afloat. 'Many firms have already stopped hiring, and for the first time since the 2008 crash, those who will contract or close now outnumber those who will grow,' he said. 'The Government must look in every corner for growth measures, rather than hiking auto-enrolment contributions and potentially levying extra NICs on top of those. 'That would be a double whammy - a nail in the coffin for job creation, targeting small employers who are disproportionately those with roles around the current thresholds. He added: 'We won't get growth or jobs if we get stuck in a cycle of constantly coming back with a new wave of employment costs, at the same time as the Employment legislation heaps risk and so deters new jobs.' His call was echoed by Kate Nicholls, the chairman of UK Hospitality, which represents 100,000 pubs, restaurants and hotels. 'In the ongoing cost of living and cost of doing business crisis, if costs increase further hospitality businesses will have to make some very tough decisions and this will include curbing operating hours, cutting headcount and keeping a lid on pay increases for managers and middle income earners,' she said. 'At the end of the day, something has to give - you can't squeeze a quart out of a pint pot.' UK Hospitality has previously warned that nearly 750 hospitality venues closed between October and December last year, an average of just over eight closures a day. Pubs and restaurants with casual workers are expected to be hit especially hard by the Government's employment rights reforms, which will make it more difficult to hire workers on zero-hours contracts. The pensions review will affect almost all full-time employees. While it could result in higher pension contributions for workers, bosses could decide to slash more generous schemes to cover costs, take on fewer workers or reduce wages. The DWP's pensions review will also look at the cost of the state pension, which is expected to be three times its forecast level by the end of the decade under the Government's triple lock policy. Sources at the department said it would look at life expectancy data and the impact of previous hikes in the state pension age. The triple lock is expected to cost more than £15bn a year by the end of the current parliament. The state pension age, which is currently 66, will increase to 67 between 2026 and 2028, and then 68 between 2044 and 2046, based on current legislation. However, this could be brought forward.
