The Mansion House Speech: An Explanation and Its Importance to You
In her second Mansion House speech, delivered on July 15, Chancellor Rachel Reeves outlined a series of reforms aimed at stabilising the economy, securing investment, and delivering changes across financial services and pensions.
The speech marked the launch of the government's long-awaited pensions adequacy review, which will focus on ensuring future-proof retirement income for UK citizens. The review will assess the adequacy of current auto-enrolment contributions and explore ways to boost retirement savings. Notably, the review will cover not only workplace and private pensions but also the state pension and retirement savings among the self-employed.
One of the key areas of the review could be the state pension, which has become increasingly expensive due to an ageing population and the state pension triple lock. City bosses have urged Reeves to focus on cutting the cost of investing, particularly by removing stamp duty when shares are bought.
In addition to pension reforms, the speech highlighted several financial regulation initiatives. The government aims to streamline regulation, rolling back measures that have gone too far in seeking to eliminate risk. Significant reforms are planned for the Financial Ombudsman Service, limiting claims to ten years, and changes to capital requirements will enable UK banks to lend more and invest more in infrastructure and businesses.
A new taskforce will work with the Office for Investment to attract businesses to list on the London Stock Exchange, promoting investment in the UK. The creation of Defined Contribution and Local Government Pension Scheme mega funds will increase investment in productive assets such as infrastructure and private equity.
The strategy will also focus on supporting firms to innovate by ensuring they can access and develop the talent they need, and promoting the UK as a great place to do business globally. The push comes after the Financial Conduct Authority (FCA) revealed "once in a generation" advice changes last month, which could result in millions more people getting help managing their money without having to pay for regulated advice.
Business lobby group CBI, investment platforms including Hargreaves Lansdown and Interactive Investor, and business leaders from Shell, HSBC, and AstraZeneca are calling for "bold action" to bolster the London Stock Exchange as a global capital markets hub.
Torsten Bell, the pensions minister, has suggested that auto-enrolment rates will not rise this parliament, indicating that any reforms could take place over the longer term. However, experts believe that the current minimum contribution under auto-enrolment rules is not enough for a comfortable retirement.
The chancellor is expected to reiterate her fiscal rules during the speech, and there are expectations of plans to loosen financial regulation. The speech is part of the government's ongoing efforts to address systemic issues that mean millions are under-saving for retirement and to secure investment in the UK's economy.
- The government's pensions adequacy review, launched in the Chancellor's speech, will focus on assessing the adequacy of current auto-enrolment contributions and exploring ways to boost retirement savings, with a view to ensuring future-proof retirement income for UK citizens.
- In addition to pension reforms, significant financial regulation initiatives are planned, including limiting claims at the Financial Ombudsman Service to ten years, changes to capital requirements to enable UK banks to lend and invest more, and establishing a new taskforce to attract businesses to list on the London Stock Exchange.
- Business leaders and organizations such as CBI, Hargreaves Lansdown, Interactive Investor, Shell, HSBC, AstraZeneca, and Torsten Bell, the pensions minister, have called for bold action to bolster the London Stock Exchange as a global capital markets hub and increase investment in infrastructure and businesses.
