Commenting on the Chancellor's announcement that pension funds will be encouraged to invest in infrastructure, Royal London Director of Policy Steve Webb said:
"If the Government is serious about unlocking more pension fund money to spend on infrastructure, this Budget announcement is likely to be a damp squib. The small print of the Budget says that all this amounts to is simply asking the Pensions Regulator to 'clarify the guidance' given to pension funds about long-term investment. If we want to see serious money being invested by pension funds in infrastructure we need a supply of projects that pension funds can invest in, not minor tweaks to rules and guidelines."
Steve Webb also criticised the Chancellor for not doing more to support household incomes in April 2018 when pension contributions under automatic enrolment rules will rise for employees from 1% to 3%. He said:
"In April next year, millions of workers will be asked to put more money in their pension, and it is vital that they do not opt out as a result. The Chancellor should have done more to support household incomes next April to soften the blow of the pension contribution increase. Instead his meagre inflation-linked increase in the tax-free personal allowance means most people will still be out of pocket unless they also get a pay rise. This is a missed opportunity at a crucial moment in UK pension policy."
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About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.