Budget 2018

Trustees Agenda posted on 29 October, 2018

The Chancellor has presented his 2018 Budget. Several of the announcements relating to pensions in the Budget built upon announcement previously made regarding investment in patient capital, cold calling, the Pensions Dashboard, public sector pensions and pension provision for the self-employed.

In relation to pension fund investment in patient capital, the Budget contained an announcements for provision of support of pension funds through the British Business Bank and for the FCA to publish (by the end of 2018) a paper exploring how effectively the UK's existing fund regime enables investment in patient capital. Additionally, there is to be a consultation undertaken by the DWP in 2019 on the function of the pensions charge cap to ensure that it does not unduly restrict the use of performance fees and a consultation by the FCA by the end of 2018 on updating the permitted links framework to allow unit-linked pension funds to invest in an appropriate range of patient capital assets.

The Government has confirmed that it will shortly be implementing legislation to make pensions cold calling illegal.

The Budget also reconfirmed the Government's commitment to producing a Pensions Dashboard, with additional funding being provided to the project in 2019/20. The DWP is also due to give a consultation later in 2018 on Pension Dashboards.

The document also stated that the DWP is due to publish a paper detailing the government's approach to increasing pension participation and savings amongst the self-employed.

Following the publication in September 2018 of documents relating to the quadrennial actuarial valuations of the public service pension schemes, the Budget also confirmed a reduction of the discount rate for calculating employer contributions in unfunded public service pension schemes to 2.4% plus CPI.

The Budget also confirmed that in the 2019/20, the lifetime allowance for pension savings will increase in line with CPI to £1,055,000.