XPS Group poll reveals over half of pension schemes in favour of Labour Government introducing tax incentives to increase pension investment in UK growth…
On Saturday the 20th of July, the UK Government announced a two-stage pension review with the first phase focusing on pension investment and the second on retirement security. This comes as an XPS Group poll of 320 pension scheme representatives who attended a webinar on the 18th of July revealed their findings.
- Over half (56%) view new tax incentives as being the best way for the Government to drive pension investment in UK growth;
- Just under a third (30%) think the Government must improve the attractiveness of the UK investment market first in order to drive increased investment;
- 39% believe that mandating higher contributions is key to the Government improving retirement security;
- And finally, just over 1 in 5 (23%) support incentivising โsidecarโ, or short-term savings alongside pensions, to enhance retirement security.
Pension schemes would favour tax incentives by the new Government
Sophia Singleton, Head of DC advisory at XPS Group said, โWhile the governmentโs review of DC investment in UK growth is welcome, policymakers must recognise the strengths of existing investment strategies. To invest more of DC savings in the UK, clear incentives and new opportunities will be needed. The second stage of the review will also be crucial. Improving the adequacy of savings not only bolsters retirement security but can also drive more pension investment in the UK economy.โ
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- Wayne Segers
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- Sophia Singleton
Wayne Segers, Partner at XPS Group added, โThere is only passing mention of private DB pensions in the pension review. It is unlikely that trustees and employers of DB schemes will be persuaded by any Government to add significant investment risk given the hard-fought security achieved over the last 20 years. And the level of membersโ benefits in DB does not directly depend on investment returns. Rather, the Government should progress changes to surplus rules, ideally as part of the announced Pension Schemes Bill. Previous XPS analysis showed that safely generating surplus can create ยฃ100bn of value for members and employers that in turn can help our economy.โ
Click here to view XPS Survey โRunning DB schemes on effectivelyโ.
About XPS Group
XPS Groupย is a leading UK consulting and administration business specialising in the pensions and insurance sectors. A FTSE 250 company, XPS combines expertise and insight with advanced technology and analytics to address the needs of over 1,400 pension schemes and their sponsoring employers on an ongoing and project basis. We undertake pensions administration for over one million members and provide advisory services to schemes and corporate sponsors in respect of schemes of all sizes, including 88 with assets over ยฃ1bn.ย We also provide wider ranging support to insurance companies in the life and bulk annuities sector.
In 2024 XPS was awarded Actuarial/Pensions Consultancy of the Year for the third time in four years and Sponsor Covenant/IRM Adviser of the Year at the UK Pensions Awards. XPS was also awarded Covenant Adviser of the Year Award at the Pensions Age Awards in 2024
