Life & Pensions Newsletter July 2024: SEC Newgate’s thoughts

From our insights this month, pensions funding and deficit saw the greatest number of mentions between May and June with 529 stories, followed by State Pensions with 291 (source: Brandwatch). A key topic of interest is around Labour’s manifesto pledge to undertake a review of the pensions landscape to consider “further steps” to “improve security in retirement”, as well as to “increase productive investment in the UK economy.”

Investment into more UK assets and the push for growth has been key areas of discussion. Broadly welcomed by the industry, for many pensions Scheme it would invest more in UK productive investment if attractive investment opportunities, as well as tax breaks and incentives were made available. No question that from a Scheme and Trustee perspective, they will be cautious and resists anything that may not be in members best interests.

Labour has also insisted that it will retain the triple lock for the state pension, adopt reforms to workplace pensions to deliver better outcomes for the UK savers and pensioners. At a time when there is a growing need to address the problem of insufficient pension savings, there is a need for a shift in pension reforms to encourage more people to save for retirement. It will be important to see how the new government will help pension savers and make retirement security a reality.

The role of pensions in climate change efforts was also highlighted in the Labour manifesto, as the party said that the financial services industry has a role to play in private capital to address the "greatest long-term challenge of our age". It said that it will look to mandate UK-regulated financial institutions, including banks, asset managers, pension funds, and insurers, and FTSE 100 companies to develop and implement credible “transition plans that align” with the 1.5°C goal of the Paris Agreement. This is a great opportunity for the UK, to provide both the financial innovation and political momentum needed to ensure that it is a global leader in the fight against climate change.

While Labour’s manifesto is very broad in scope, it will be interested to see how it will play out if Labour is elected.

Total mentions by topic (May-June)

• Pensions funding and deficit saw the greatest number of mentions between May and June with 529 stories, followed by State Pensions with 291.

Examples of Pensions funding and deficit mentions this month

• ​Paul Lewis - A 2% drop in Class 1 National Insurance would cost nearly £10bn which Conservatives would pay for by welfare cuts https://bit.ly/3ySs4j8 if it happens NI paid by workers would have been halved from 12% to 6% and need a Treasury subsidy to the NI Fund which pays state pension 
• Sky News - 'Are you surprised how many times you've been sent out on behalf of the govt?' - @WilfredFrost ‘There's probably a good reason why I'm sent out…much of this election is about tax and also how you're going to fund tax cuts', says Work and Pensions Secretary @MelJStride 
• Josephine Cumbo - Labour has pledged to "act to increase investment from pension funds in UK markets".  Voters need to know if this means Labour plans to force #pension funds to invest in the UK.