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GB Now, UK, London (2025)

28/04/2025

Rachel Reeves pledges £50BILLION pension investment in UK projects - despite rejecting 'Buy British' just days earlier

Britain's biggest retirement providers are set to commit to a significant investment in UK projects
Rachel Reeves is finalising a £50billion-valued deal with pension funds to invest in British assets.

The Chancellor is set to announce a new version of the Mansion House Compact, a voluntary investment agreement, which will require the biggest retirement providers to commit to a significant investment in UK projects.

Under the new Compact, pension providers will commit to investing 10 per cent of savers' cash into unlisted assets by 2030.

Half of this amount, approximately £50billion, will be specifically devoted to UK investments.

This voluntary code follows several rounds of negotiations between key stakeholders - a first draft was circulated last week following what sources described as "sometimes tense" negotiations between Treasury Ministers, industry bosses and the City of London Corporation.

Reeves is expected to announce the revamped compact this summer.

The Chancellor is also planning cash ISA reforms to encourage investment - and could announce changes at her Mansion House speech in July.

The original Mansion House agreement was signed by 11 providers including Aegon, Aviva, L&G, Nest, Phoenix and Scottish Widows.

More funds are expected to join, with Fidelity, the People's Pension, TPT, Royal London, Willis Towers Watson and USS in discussions to sign the pact.

Investment in unlisted equities will primarily direct pension cash into infrastructure projects and other large developments - which have the potential to deliver higher returns for savers compared to traditional options.

Some industry executives have raised concerns that these targets may conflict with their fiduciary duty to members.

Others have highlighted the relative lack of transparency in private markets compared to traditional share markets.

And the Treasury has acknowledged these concerns, agreeing that extra UK investment depends on the Government providing high-quality assets.

But Reeves's fresh commitment to UK investment comes despite her failing to back a "buy British" campaign just days ago.

Lib Dem deputy leader Daisy Cooper had urged the Chancellor to commit to the campaign on April 8 "as part of a broader national effort to encourage people to buy British here at home".

Reeves replied: "In terms of buying British, I think everyone will make their own decisions.

"What we don't want to see is a trade war, with Britain becoming inward-looking, because if every country in the world decided that they only wanted to buy things produced in their country, that is not a good way forward."

Sir Keir Starmer's official spokesman later backed Reeves - and said there were no plans for the Government to launch a buy British campaign.

25/04/2025

State pension disaster as 'basic' DWP payments fall short of 'minimum retirement standard'

Britons are being urged to check how much they will eventually get from state pension payments once they reach retirement
Half of UK adults are unaware of how much they will receive from their state pension, according to new research from Standard Life's Retirement Voice report.

Analysts are sounding the alarm that payments from the Department for Work and Pensions (DWP) only cover a "minimum standard of living" by itself.

Nearly a third (32 per cent) of those polled do not know the age at which they will qualify for their state pension, including 12 per cent of those aged 55-64 who are approaching retirement.

Over half admitted they had no idea of the current value of state pension payments (51 per cent) and were also unaware of how to calculate their entitlement (52 per cent).

More than a third (34 per cent) did not know that National Insurance contributions determine their pension amount, with 35 years of contributions needed to get the full amount.

As of April, the state pension payment rate jumped to £11,973 a year for the 2025-26 tax year, inching it closer to the personal savings allowance.

Tax analysts are warning that older Britons should expect to lose more of their payments to HM Revenue and Customs (HMRC) if the retirement benefit continues on this trajectory.

This is due to the impact of fiscal drag, which occurs when incomes or inflation rise during a period of time when tax allowances are frozen.

Dean Butler, the managing director for Retail Direct at Standard Life, commented: "With the state pension set to rise to £11,973 a year for the 2025-26 tax year, it remains a crucial part of many people's retirement income.

"But despite its importance, there's still a lot of confusion around how it works and how much people might get."

He added: "Knowing when you'll start receiving your state pension and how much you're likely to get is an important part of planning for retirement."

Butler also warned about potential tax implications: "With the personal allowance frozen at £12,570 until 2028, there's a good chance that people will pay tax on the state pension alone from 2026 or 2027."

Around 750,000 people are not receiving the correct state pension amount due to errors in National Insurance records or DWP failures to adjust for changed circumstances.

Those who spent time raising children while not in paid employment should verify they received NI credit for this period, Butler claims.

Women whose husbands retired from 17 March 2008 should check their entitlement has been increased appropriately, while those over 80 on a low pension should ensure the DWP has assessed them for the over-80s rate.

Universal Credit recipients should confirm they have been receiving NI credits. These checks are essential as errors could significantly impact retirement income.

Butler asserted that the state pension only covers a "very basic lifestyle", falling short of what's needed for a "minimum standard of living in retirement", according to the Pensions and Lifetime Savings Association.

As such, the retirement expert warns that state pension should therefore only form part of someone's overall retirement plan.

23/04/2025

Baby boomers told to get back to work as IMF calls for pension age rise to boost economy: '70 is new 50!'

Research suggests that today's 70-year-olds boast the same fitness levels as 56-year-olds from 25 years ago
The International Monetary Fund (IMF) is calling on baby boomers to get back to work and postpone accessing their pension savings, declaring that "70s are the new 50s".

As part of its latest analysis, the organsiation is claiming that older people across the globe today are significantly sharper and stronger than 25 years ago, suggesting Governments should raise retirement ages and slash benefits for pensioners.

Research across 41 countries found that a 70-year-old in 2022 had the same cognitive function as the average 53-year-old in 2000. The findings came from detailed surveys of one million people aged 50 and older, testing memory, orientation and basic maths skills.

Physical health has also significantly improved, with tests of grip strength and lung function revealing remarkable progress. Today's 70-year-olds boast the same fitness levels as 56-year-olds from 25 years ago.

The IMF expects this rapid improvement to continue in coming decades, albeit at a slightly slower pace. These leaps in healthy life spans represent a dramatic shift in what it means to be elderly in the 2020s.

However, the IMF warned that Governments cannot afford to let growing numbers of fit and sharp older people enjoy long retirements. Instead, baby boomers are being urged to work later in life to address economic challenges.

However, the Fund cautioned that "demographic forces seem to be casting long shadows over prospects for living standards and public finances".

This recommendation comes as countries face mounting fiscal pressures from ageing populations. The combination of plunging birth rates and increasing longevity will reduce global economic growth by 1.1 percentage points annually for the next quarter century.

As populations age and fewer children are born, countries face unprecedented challenges in maintaining growth and public services. To ease these fiscal pressures, the IMF argues Governments must overhaul pension ages and slash early retirement benefits.

The Fund also recommends encouraging workers to delay their retirement. "With lower growth prospects and historically high levels of public debt, many countries will need significant fiscal efforts to keep debt-to-GDP ratios stable beyond 2030," the IMF said.

These policy changes are seen as essential to maintain economic stability as populations continue to age. Britain faces these challenges acutely, with a £2.8 trillion debt pile that nearly eclipses the size of the economy.

The fertility rate in England and Wales fell to its lowest level since records began in 1938. In 2023, it reached just 1.44 children per woman.

This combination of high debt and record-low birth rates makes the IMF's recommendations particularly relevant for the UK's economic future.

The IMF predicts the global population will stop growing by 2080-2100, though this could happen sooner if birth rates continue to decline.

China faces particularly steep growth challenges due to its historically low birth rate.

The Fund projects China will experience a more dramatic economic slowdown over the next quarter century compared to other nations.

Despite improvements in health spans, the IMF noted persistent gaps between rich and poor populations.

The researchers encouraged countries to look to Singapore for inspiration on minimising such disparities.

23/04/2025

State pension crisis looms as nearly half of new taxpayers will be retirees by 2027 under stealth tax raid

Analysts are breaking down how the state pension triple lock will result in retirees paying more tax as an effect of fiscal drag
Analysts are sounding the alarm that nearly half of new taxpayers living in the UK will be pensioners by 2027 unless the Labour Government takes action.

Millions of pensioners could soon face income tax for the first time without even realising it due to the impact of frozen allowances, experts warn.

Personal finance expert Fiona Peake from Ocean Finance has warned that a combination of frozen tax thresholds and rising pension payments is silently pushing more retirees into the tax bracket.

This stealth tax situation is developing as the state pension continues to increase annually thanks to the triple lock while the personal allowance remains fixed at £12,570.

"Nearly 18 million more people are expected to be paying income tax by 2027, and almost half of them will be over 60," explains Peake.

The impact of fiscal drag creates a particularly difficult situation for pensioners who may have carefully budgeted for retirement without anticipating this additional tax burden.

As it stands, the full new state pension now pays £221.20 a week, which amounts to around £11,500 a year. This figure sits just a few hundred pounds below the personal allowance threshold of £12,570.

"Add even a modest private or workplace pension, and suddenly you've got a tax bill," warns Peake.

Peake highlights how this tax change is happening without fanfare. "The frustrating thing is, this is happening quietly. It's not a tax rise on paper, but it feels like one in practice."

Many pensioners will simply receive a letter or notice a tax code change without understanding why they're suddenly being taxed.

"It's especially tough for those on a fixed income who are already watching every penny," notes Peake.

With inflation expected to rise again this year, despite the consumer price index (CPI) rate falling to 2.6 per cent in March, this represents yet another financial challenge for pensioners.

To help pensioners navigate this tax challenge, Peake offers several practical tips.

"If you've got a defined contribution pension, think about how you take money out. Spreading withdrawals across tax years, instead of taking a large lump sum, can help keep your income below the threshold," she advises.

Marriage Allowance is another opportunity for savings.

"Married couples or civil partners could save over £250 a year if one earns less than the personal allowance. If one of you isn't using all your tax-free allowance, transfer some of it."

Peake also recommends maximising ISA allowances to protect savings from tax. "ISAs protect your savings from tax, including interest and dividends. With savings rates still decent and inflation coming down, it's a good time to build up your ISA pot," she says.

Delaying the state pension could be another strategy worth considering, according to the retirement expert.

"For every year you delay, it goes up by nearly 5.8 per cent, and that higher amount is paid for life. It could be a smart way to increase your future pension without triggering tax straight away." Checking tax codes regularly is another important step Peake recommends.

"HMRC doesn't always get tax codes right, especially if you've got more than one income. A wrong code could mean you're paying too much," she cautions.

For those still in employment, increasing pension contributions offers dual benefits. "Adding more into your pension can be a clever move. You'll reduce your taxable income, get tax relief on your contributions, and boost your retirement pot at the same time. It's one of the few ways to shrink your tax bill now and benefit later."

22/04/2025

DWP could owe you compensation after state pension issue left older Briton £3k a year worse off

A British expat was found to be eligible for £675 in compensation after the DWP identified an issue related to the state pension

Thousands of pensioners could be owed compensation from the Department for Work and Pensions (DWP) due to a newly identified state pension communication issue.

The Parliamentary and Health Service Ombudsman (PHSO) has urged older people in Britain who may be affected to come forward as soon as possible.

This latest issue is entirely separate from the Women Against State Pension Inequality (Waspi) scandal that affected 3.6 million women born in the 1950s.

An investigation revealed the DWP took eight years to inform a British expat about changes to his pension that would leave him £3,000 a year worse off.

The Ombudsman is now pressing the Government to ensure all communications are "always fair, clear, and consistent" with claimants going forward.

Adrian Furnival, 82, and his wife Sheila, 67, moved to Brittany in 1994, with Adrian only discovering in 2018, through an annual statement from the DWP, that from 2020 he would no longer receive Adult Dependency Increase (ADI) payments.

This change meant he would be more than £250 a month worse off. The PHSO investigation found that the Department failed to properly communicate these changes to Adrian when they should have done so in April 2010.

The DWP also failed to respond to his initial queries and complaints in a timely manner. Adult Dependency Increase payments are a supplement given to households when the main earner reached state pension age, but their partner had not yet reached it.

UK residents were informed about changes to ADI payments back in 2010. However, the PHSO investigation highlighted that the DWP failed to properly brief Adrian about these updates.

The Ombudsman has recommended that the DWP apologises and pay Adrian £675 for the injustice he suffered. This compensation is meant to address the fact that without proper information, Adrian lost the opportunity to prepare financially for his retirement.

The changes ultimately ended his ADI payments completely in 2020. Rebecca Hilsenrath, Parliamentary and Health Service Ombudsman, didn't mince words about the situation.

"Poor communication from Government departments damages trust in public services," she said. "DWP has a history of failing to communicate pension policy changes clearly and failing to learn from its mistakes."

She added: "In Adrian's case, this meant that, without the right information, he lost the opportunity to prepare for his retirement. It also caused him unnecessary financial worry."

Hilsenrath urged action for those affected: "Anyone who believes they have had a similar experience to Adrian should contact DWP."

The PHSO revealed that while the exact number of expats entitled to ADI is unknown, in May 2019 - just a year before ADI ended - the DWP told Parliament that 10,817 people were still receiving these payments.

The watchdog is pressing the DWP to provide "a comparable remedy to anyone who approaches the Department in a similar situation.

This means thousands of pensioners could potentially be owed the same £675 compensation if they experienced similar communication failures.

Last December, the DWP admitted maladministration regarding its communication to 1950s-born women about State Pension age changes.

However, unlike the current ADI issue, the department did not establish a compensation scheme for those women. The department has pledged to take on board the insights gained from this case and is working alongside the Ombudsman.

18/04/2025

State pension triple lock WILL NOT be axed as older Britons to get £1,900 windfall, Labour confirms

Under the triple lock, state pensions are guaranteed to rise by at least 2.5 per cent every year
The state pension triple lock will not be scrapped by the Labour Government despite calls to means-test payments, a senior Government minister has revealed.

Pensions Minister Torsten Bell has confirmed state pensions will be uprated throughout the current Parliament, potentially increasing them by up to £1,900 by the end of the term.

The commitment was made during a Treasury debate when Bell was questioned about fiscal steps to support pensioners with the cost of living.

Bell emphasised that raising state pensions is among the Government's "top priorities for pensioners" alongside rescuing the NHS, providing reassurance to millions of pensioners who have already seen their payments rise by 4.1 per cent this month.

The 4.1 per cent increase under the triple lock took effect this week, benefiting more than 12 million pensioners across the country. Bell highlighted that this rise is "well ahead of inflation" and provides substantial financial support.

For those receiving the full new state pension, the increase is worth an extra £470 per year. Recipients of the full basic state pension will see their payments rise by £360 annually.

The triple lock ensures payments rise by either inflation, average wages or 2.5 per cent; whichever is highest. Industry experts previously expressed relief that the Government maintained the triple lock following the Chancellor's Spring Statement.

During the debate, Bell confirmed the Government's commitment to uprating pensions beyond just this year. "We are not just increasing pensions above the rate of inflation this year but doing so throughout the current parliament," he stated.

The minister reiterated Labour's promise to protect the triple lock, which is expected to increase spending on state pensions by around £31billion.

Bell cited that the Government is "absolutely committed to supporting pensioners and giving them the dignity and security they deserve in retirement."

Despite this pledge, pension industry experts have warned that retirement benefit increases could be a "double-edged sword" for some recipients.

As the state pension rises, more British pensioners are being pushed into tax-paying brackets for the first time due to the impact of fiscal drag.

AJ Bell director of public policy, Tom Selby, warned that the state pension is now "perilously" close to the frozen £12,570 personal allowance.

This means more pensioners may find themselves paying income tax on their pension income. In response to these tax concerns, Bell pointed out that the "vast majority" of pensioners were already income tax payers under the previous Government.

He noted that when individuals' wider income was taken into account in 2022/23, over 80 per cent of pensioners had an income exceeding the Personal Allowance Tax Threshold.

Despite this, Selby warned that the Government is "walking a precarious financial tightrope to balance its fiscal rules" with little room for manoeuvre.

He suggested that state pension spending could "move into the Treasury's crosshairs in the next few years" as the government seeks further savings.

"Any changes to the state pension will be hotly contested," Selby cautioned. He added that "crunch time is fast approaching" when the Government must address fundamental questions about what the state pension should offer.

17/04/2025

'Pension tweak' could help Britons cut tax by up to 62% under new National Insurance rules

With take-home pay squeezed, workers are being urged to explore tax-efficient ways to boost long-term savings
Millions of workers across the UK could cut their tax bills and boost their retirement savings using a little-known pension strategy, as new National Insurance (NI) rules take effect from this month.

This tax-efficient method allows employees to give up part of their salary in exchange for their employer making pension contributions on their behalf.

The arrangement benefits both parties as employees save on income tax and National Insurance on the sacrificed portion, while employers avoid paying the 15 per cent employer NI contribution on that amount.

As of April 2025, the National Living Wage increased from £11.44 to £12.21 per hour, while the threshold at which employers must start paying NI on behalf of employees dropped from £9,100 to £5,000.

At the same time, the employer NI rate rose from 13.8 per cent to 15 per cent, increasing the cost of employment for businesses and reducing take-home pay for many workers.

But experts say a simple change in how employees contribute to their pensions — known as salary sacrifice — could soften the blow and deliver substantial savings for both employees and employers.

Clare Stinton, head of workplace saving analysis at Hargreaves Lansdown said: "Tax hikes can make April a difficult month but there’s a real sting in the tail for employers this year.

"The cost of having employees has just surged, thanks to a double whammy of higher wages and increased National Insurance costs.

"However, there is one proven way to soften the NI hike: salary sacrifice. The result is tax savings for both parties."

For employees, salary sacrifice can deliver tax savings between 28 and 47 per cent, depending on their income. But for higher earners, the savings can be even greater.

She said: "For those sacrificing income between £100,000 and £125,140, the effective savings soar to 62 per cent, thanks to the way tax bands operate."

Amid rising employment costs, the figures from Hargreaves Lansdowne show how salary sacrifice could help save thousands of pounds each year.

A business employing 20 people each earning £35,000 a year would see its employer NI bill jump from £71,484 in 2024/25 to £90,000 in 2025/26, a rise of over £18,000.

By introducing a five per cent salary sacrifice scheme, it could save £5,250 in NI, while each employee would save around £140 in NI contributions themselves.

The potential benefit grows with larger workforces and higher salaries. For example, an employer with 200 employees earning £40,000 each could save £60,000 in NI through salary sacrifice — and employees could save around £160 each.

While many associate salary sacrifice with business accounting, personal finance experts say workers should ask their employer if such a scheme is available and consider increasing their pension contributions to take advantage of the NI and tax savings.

For consumers struggling with frozen tax thresholds and rising living costs, salary sacrifice offers a rare opportunity to boost retirement savings while reducing immediate tax liabilities.

Stinton concluded: "Any savings made by the employer can be reinvested back into the business or used to enhance employee pensions or wider benefits packages further.

"It could prove a very cost-effective way of boosting staff retention or way to control business costs at a difficult time.”

17/04/2025

State pension age to RISE next year as older Britons 'likely to face financial risk'

The state pension age is due to rise to 67 next year
Analysts are sounding the alarm that millions of Britons could be in line for a financial shock next year as the state pension age is set to increase from 66 to 67.

The change, scheduled for 2026, will particularly affect those born between April 6, 1960, and March 6, 1961 with many people reportedly being unaware of the changes.

Experts are warning that a lack of awareness could lead to serious financial consequences for those making major life decisions based on incorrect assumptions about when they will receive their state pension.

For example, some individuals might pay off debts, quit jobs or relocate, only to discover their pension payments will be delayed by up to a year.

A study by the Institute for Fiscal Studies (IFS) has revealed that only 60 per cent of people can accurately identify when they will be entitled to state pension.

Those due to receive payments at age 66, before the upcoming change, were slightly more knowledgeable. However, people directly affected by next year's increase were found to be the least informed about their pension age.

This knowledge gap exists despite information about the state pension age changes being widely available on the Government's website.

The study revealed that 59 per cent of respondents were incorrect about when they would receive their state pension. A staggering 42 per cent believed they would only get their state pension years later than they actually would.

Meanwhile, 12 per cent thought they would receive their pension sooner than the reality. A further five per cent admitted they had no idea when they would become eligible for payments.

Overall, 22 per cent of people believed they would get their state pension sooner than they actually will.

The IFS experts warned: "Together this means that more than one in five people have knowledge gaps that can lead to them making possibly poor decisions about their savings or when they retire."

The research identified certain groups at higher risk of misunderstanding their pension age. Women, self-employed individuals and people on low incomes were more likely to be incorrect about when they could claim their state pension.

According to the IFS experts, these findings indicate that "people who are potentially less financially secure are more likely to face financial risk because of their lack of understanding."

They added: "Some of those people may therefore be making these critical decisions based on incorrect assumptions about when they can start claiming the state pension."

In light of these concerning findings, the IFS is urging the government to take proactive measures.

They recommend that people should receive official notification about their likely state pension age on their 50th birthday.

This early communication would ensure individuals are well-informed well in advance of retirement.

It would also help prevent situations where people are caught off guard by government changes to the state pension age.

16/04/2025

Rachel Reeves's £40bn tax raid on pension savings could 'come at the expense' of workers

Analysts are sounding the alarm over the rumoured tax change which would impact pension savings
A rumoured £40billion tax raid on pension savings by Chancellor Rachel Reeves could "come at the expense" of Britons with workplace retirement funds, analysts warn.

Under the Chancellor's proposed reforms, companies will be allowed to access defined benefit (DB) pension surpluses with a 25 per cent tax charge.

It is understood that Labour's potential move would allow firms to access £160billion in DB pension surpluses.

This would loosen existing safeguards that protect pensions from riskier investments. Under the proposals, any money drawn down would instantly be hit with a 25 per cent tax charge.

This would provide a much-needed boost for Reeves as she seeks to avoid breaching her own fiscal rules. Approximately 8.8 million people are currently members of defined benefit schemes across the UK.

Romi Savova, the CEO and Founder of PensionBee, has weighed in on the Chancellor's plans.

"Tapping pension surpluses to boost economic growth can be a well-considered approach provided it doesn't come at the expense of member security," she said.

She warned that any approach would need to consider various economic scenarios, including potential interest rate reductions and stock market volatility.

"These funds ultimately belong to pension savers and must be treated with the utmost care," Savova added.

She questioned why more surpluses are not being passed back to savers directly.

"The Government must tread carefully - trust in pensions is hard won and easily lost."

Concerns about the reforms have been echoed by pension scheme members themselves.

In a recent poll of 1,000 members of defined benefit schemes, conducted by the Pension Insurance Corporation, 60 per cent said the Government's plans would put their pensions at risk.

Consultants at Hymans Robertson estimate that around £160billion could be available for companies to draw down from these pension funds.

Options for using the cash include paying more to shareholders, increasing spending on their business or making investments elsewhere.

The Government is due to report back in the spring with full details of its reforms, instead of during the Autumn Budget later in the year.

Stephen Lowe, director at retirement specialist Just Group, has warned that the move could reduce pensions and lead to riskier investments.

"Most commentators have been fixated on how this surplus is going to be funnelled into building UK reservoirs and bridges, but they've missed a more immediate benefit the Chancellor is targeting – tax revenue," he said.

"For every £10billion of pension funds surplus extracted, £2.5billion goes straight into the Treasury's bank account."

"Extracting surplus and making riskier investments, before pensions have been guaranteed, could lead to less money in the scheme and therefore put retirements at risk," he warned.

The rumoured proposal also comes as the Government bids to attract investment in British infrastructure and the beleaguered London stock market.

Nausicaa Delfas, chief executive of the Pensions Regulator, said: "Where schemes are fully funded and there are protections in place for members, we support efforts to help trustees and employers consider how to safely release surplus."

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