Three pension updates from the Budget 2018
The Chancellor, Philip Hammond, delivered his Budget speech on 29 October. Outlined below are some important pension updates included in the Budget.
The Pension Dashboard
Philip Hammond committed to a consultation later in the year on the implementation of the Pension Dashboard and the inclusion of State Pension information. The expected launch date of March 2019 is fast approaching, however a spokesperson for AJ Bell commented, “the fact a commitment has finally been made by the DWP to provide State Pension information is a positive step in the right direction.”
An additional £5 million a year for the DWP in 2019/20 is a symbol of commitment from the Government that it is taking this agenda forward.
‘Patient capital’ funding
Patient capital, another name for long term capital, is the capital an investor is willing to invest with no expectation of returning a quick profit, but with the anticipation of more substantial returns in the future.
Philip Hammond said actions were in place to get around £1trn of defined contribution (DC) assets to be invested in so-called ‘patient capital’. This is considered the most impactful announcement to come out of the Budget in respect of pensions.
The Financial Conduct Authority (FCA) will soon launch a consultation to allow unit-linked pension funds to invest in this type of asset class.
Cold-calling ban
This ban has been continually delayed for some time now, but it is now expected to take effect later this year.
The Treasury has published draft regulations to enable and enforce a ban on pensions cold-calling where consumers don’t already have an existing client relationship with the caller.
