The first thing to say about the Autumn Statement is that as far as financial services is concerned, it’s mostly all about pensions.
The second thing to say is for all the policy papers, proposals and consultations that landed last week, it actually seems quite co-ordinated for a change.
Among the papers, there are lots of references to different agencies, whether that’s the Department for Work and Pensions (DWP), the Treasury or The Pensions Regulator. The FCA gets less of a mention, but that’s understandable given the kind of proposals we’re looking at. But on the surface at least, there is the acknowledgement that there are other agencies are involved.
The other word that keeps coming up is consolidation. The government is keen for a lot more of this on the pensions front – bigger schemes, which are easier to manage.
Amid the raft of publications, there are a few worth flagging here.
Under the snappily titled ‘Looking to the future: Greater member security and rebalancing risk’, the government has rolled a few areas for discussion into one.
The first part of this document sets out the feedback the DWP received on the earlier small pots consultation, the government’s response and next steps.
The second part is a call for evidence on the ‘pot for life’ idea (rebranded in the Autumn Statement as ‘lifetime provider’), as well as how to grow the the Collective Defined Contribution (CDC) market for the future.
Separately, there is an interesting paper on master trusts which might have passed people by.
At a glance, it is addressing the regulatory approach to master trusts and providing a kind of progress report five years on. But master trusts are being seen as the basis for a lot of other things, such as default pension consolidators. There is also discussion around how master trusts will be affected the extension of auto-enrolment. So there’s a few threads being pulled together.
We also had a paper on pension trustee skills and culture, which talks about the creation of a trustee register. I was surprised there wasn’t one already to be honest, but there you go.
It’s worth pointing out that value for money comes up everywhere. It even gets a mention in the trustee paper, which encourages trustees to pursue value for money, though not necessarily the cheapest option.
Value for money is also highlighted by the FCA. It has issued a statement signalling that detailed rules for a new value for money framework for defined contribution workplace pensions will be consulted on by the regulator in spring 2024.
Away from pensions, Jeremy Hunt seemed to be awfully pleased when delivering the cut to the main rate of National Insurance from 12% to 10%.
The fact that it’s being done from 6 January is quite significant. The government couldn’t even wait until April to bring this in. We shall see if that’s a signal to gear up for an early general election.
Inevitably, that prospect of an election looms large over the announcements we saw in the Autumn Statement.
For any new government, the pension stuff is less likely to be unwound than some of the tax stuff, although that’s not to say that unravelling the tax cuts would be easy.
This might be about getting things in train now, or some early political point scoring. Or it might be a government that, if voted out, is leaving whoever follows with something of a poisoned chalice when they come into power.
Alison Gay is senior public affairs consultant at the lang cat