Big promises, but pensions left in the waiting room

In her second Mansion House speech, Chancellor Rachel Reeves unveiled what she called the “most wide-ranging package of reforms to financial services regulation in more than a decade.” Dubbed the Leeds Reforms, the measures are designed to boost UK competitiveness in an increasingly volatile global market. But while the City may be celebrating, the pensions industry is left wondering, where’s the follow-through?

The reforms ranging from changes to capital requirements and ring-fencing to a renewed push for retail investment signal a clear pivot away from the post-crisis regulatory orthodoxy. Reeves’ rhetoric was bold, promising to “cut red tape” and unleash the power of UK financial services. 

Yet despite all the talk of unlocking pension capital to fuel UK growth, the Chancellor failed to announce the second phase of the long-awaited pensions review. This omission has not gone unnoticed. While Reeves reiterated her commitment not to mandate investment in unlisted equities and praised the Mansion House Accord, there was no mention of the pension adequacy review, something many in the industry see as critical to addressing long-term outcomes for savers.

As we know the first phase of the pensions review was always meant to be just the beginning. The second phase, originally promised before the end of 2024, was supposed to focus on improving pension outcomes. That timeline has increasingly drifted. For an industry that thrives on long-term planning and regulatory certainty, this delay is more than just frustrating for the industry and many see as damaging.

Some have called the delay a “fundamental issue” that undermines confidence in the government’s commitment to meaningful pensions reform. Trustees and scheme managers are being asked to consider new investment strategies, potentially in UK-focused assets, without the clarity or policy framework to support those decisions. 

As Parliament heads into summer recess, the industry continues to wait. The call for evidence on the Pensions Schemes Bill offers a glimmer of engagement, but it’s no substitute for a coherent, forward-looking strategy. Trustees need more than warm words and high-level ambitions, they need detail, direction, and above all, delivery.

The Mansion House speech may have set the tone for a more growth-oriented financial sector, but for pensions it fell short of the mark. The time for waiting is over, the industry needs action, and it needs it now.

Total mentions by topic (May– June)

Pensions funding and deficit saw the greatest number of mentions between the months of May and June with 468 stories, followed by State Pensions with 200 stories.

Examples of Pensions Funding and Deficit mentions this month 

• @dontdelay - These statements from the FCA are so important to the way financial advisers will approach future investment risk discussions and recommendation with their clients. It's great to see. ‘We know that, for far too long, we at the regulator have been seen as sheltering consumers. Of insulating people from risk. And focusing on the risks of a decision taken rather than the lost opportunity of taking none'. There is no such thing as no risk. We know that investors who don’t take risk lose out – on long-term returns, on good pension outcomes, on the funds to manage financial health throughout lifetimes. ’From this @NewModelAdviser story FCA: For too long we've been seen as sheltering consumers from risk https://citywire.com/new-model-adviser/news/fca-for-too-long-weve-been-seen-as-sheltering-consumers-from-risk/a2467315
• @AlanJLSmith - Rachel Reeves wants UK pension schemes to significantly increase their allocation to private equity investments. Despite the fact that they are higher risk, less transparent and higher fees. And have delivered lower returns: State Street’s private equity index shows that the S&P 500 outperformed private markets funds over the last 1, 3, 5 and 10 years! Another bad idea from Rachel.
• @thatginamiller - As @ScottishWidows, the #pension giant, plans to cut its exposure to UK equities from 12% to 3% - it is our view that @RachelReevesMP needs to convince pension funds, with total assets of £3.2 trillion, to invest in UK companies. The UK has the lowest domestic #equity allocation among major economies 4% vs. Australia’s 37.7% Our letter to Reeves from a year ago https://scmdirect.com/press-releases/ Our White Paper https://moneyshe.com/insights/#research+policypapers https://standard.co.uk/business/scottish-widows-pensions-relief-taxpayer-lloyds-rachel-reeves-b1234673.html @theLDNstandard @SimonEngStand @SCMDirect @MoneyShe_