Pension boost of £1,000 per year for workers under new plans from Chancellor Jeremy Hunt
A TYPICAL earner’s pension pot could increase by more than £1,000 a year under radical new plans, the Chancellor has announced.
Retirement plans for workers received a boost as Jeremy Hunt unveiled his Mansion House Reforms tonight.
The changes will increase the typical earner’s pension pot by 12 per cent bringing a total boost by as much as £16,000 for those who save over the course of their career.
The intervention could unlock as much as £75 billion of new investment in high growth businesses.
There has been concern over the low level of pension funds investing in UK assets compared to international firms.
Moves will be made to make it more like comparable Australian schemes that invest ten times more in private markets than UK schemes.
The UK pension market is the biggest in Europe and is worth more than £2.5 trillion. Big firms such as Aviva, Scottish Widows and Aegon are among those taking part.
Leading pension firms will also commit to allocating 5 per cent of their assets into unlisted equities by the end of the decade.
Under the new framework, underperforming pension schemes will be wound up into larger, better-performing ones.
It comes as analysis shows that over a five-year period a saver with a pot of £10,000 could have lost £5,000 with a poor-performing scheme.
Mr Hunt said: “British pensioners should benefit from British business success. By unlocking investment, we will boost retirement income by over £1,000 a year for typical earner over the course of their career.
“This also means more investment in our most promising companies, driving growth in the UK.”
Welfare Secretary Mel Stride said: “British workers should have the confidence that their pension savings are working as hard as they are.
“Our reforms will benefit savers and society – unlocking investment into pioneering UK businesses, growing the economy, and helping the record number of people in this country saving into a pension to achieve the retirement they want.”
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A hundred pieces of outdated EU legislation will be axed to help put rocket boosters under the UK economy by driving investment.
The Chancellor hails the ‘common sense’ changes to grasp the UK’s newfound Brexit freedoms in a boost for financial services.