No mention of pensions in Spring Statement

The pensions industry has bemoaned the fact that Chancellor Philip Hammond’s Spring Statement lacked information on plans for pensions policies but did reduce index-linked gilt issuance.

Mr Hammond also launched a consultation on establishing new frameworks for private investment in infrastructure, following the abolition of the private finance initiative (PFI), which was announced in last year’s Budget.

While industry professionals accepted that the Statement would focus on measures to ensure the stability of the UK, in preparation for the outcome of Brexit, the industry warned that long-term thinking is crucial in pensions policy.

One commentator said it was “disappointing” that the Government did not take the opportunity during the Chancellor’s Statement to offer a good news story by agreeing to extend auto-enrolment to the thousands of workers not currently covered by the scheme.

He added that it would be a good move for the Government to bring forward plans to lower the age limit for auto-enrolment, remove the lower earnings threshold and lower the earnings trigger. His words were echoed by pensions and financial inclusion minister Guy Opperman, who said that there was “no question on whether the earning limit will be lowered, or whether the age limit will be lowered from 22 to 18, but the question is when”.

The consultation is also seeking views on how the private sector can fill the gap in infrastructure finance once the UK no longer has access to the European Investment Bank.

As the Statement document notes, institutional investors, including pension funds, are a key participant in the market due to their aim to “seek long-term, stable returns, consistent with their need to fund long-term obligations”.

Steve Horton, Financial Services Partner at Milsted Langdon, said: “The Spring Statement has failed to mention the ever-changing nature of pensions in the UK and the importance of having a sound strategy in place in order to best benefit in retirement.

“Individuals who are worried they are not saving enough are urged to seek specialist financial planning advice in these unpredictable times.”

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