Chancellor pledges to 'unlock untapped firepower' of pensions

Chancellor of the Exchequer Philip Hammond promised to ‘unlock’ the “untapped firepower of defined contribution pension schemes.” In a keynote speech to the Annual Investment Association Dinner last night Mr Hammond also told investment professionals that the “ecosystem of prosperity” would be retained after Brexit.The Chancellor began by praising the UK’s “world-leading asset management industry” and the role it plays in benefitting 75% of British households through workplace pensions. He dubbed the UK’s asset management sector “an ecosystem of prosperity”.Turning to the UK’s exit from the EU he said: “And of course the immediate key to maintaining this ecosystem is ensuring we get a good Brexit deal and protecting markets from uncertainty during transition.”He added: “This Government is 100% committed to getting a Brexit deal that protects jobs, growth and investment.”He said the Government’s Future Partnership White Paper provided “a framework that allows the benefits of UK-EU financial services trade to continue and maintains open markets and deep regulatory cooperation.”He added: “Under our plan we would build upon the EU’s existing ‘equivalence’ regimes but expand their scope to recognise business activities that are in the interest of both the EU and the UK.”He said: “Investment management is incredibly important to the UK’s financial services ecosystem but these services are also just as important for the EU – portfolio delegation allows the UK investment management industry to run 35% of the assets under management in the EU – more than twice as much as any other member state.“So as we made clear, in the Technical Notices we published over the summer, we expect these arrangements to continue. “This model is the global norm and there is no reason why it should not continue to be so.“The FCA stands ready to agrees these MoUs.“I was pleased to hear the chairman of ESMA say he plans on having these agreements in place well before March and the chairman of the French Market Authority say he has ‘absolute conviction’ that they will be agreed before we leave the EU.“I share his view.”On pensions Mr Hammond said he the Government had “worked with the investment management sector to explore how we can unlock pensions investment in patient capital and specifically the untapped firepower of defined contribution pension schemes which we expect to hold over £1trn of assets by 2025.”He said his forthcoming Budget would reveal more about “how we can ensure DC pension funds are able to make long-term investment decisions, for the benefit of both their members and the wider UK economy.”In the upbeat address Mr Hammond forecast a “bigger role for London as a global hub for asset management.”He also announced the Government will launch a strategy on green finance next year.

Chancellor pledges to 'unlock untapped firepower' of pensions

Related items

News from Twitter