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Chancellor Jeremy Hunt promises to make pension pots work harder

2024-03-02 00:00:00.0 每日快报-政治原网页

Jeremy Hunt vowed he will “shine a light” on pension pots to give savers the power to build the best possible retirement they can.

The Chancellor will transform the complicated system by forcing firms to take part in Compare the Market-style comparison site that will show how well they are performing compared to their competitors.

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Chancellor Jeremy Hunt promises to shine a light on complicated pension funds (Image: Getty)

Mr Hunt added: "These changes will help focus minds as we want to get our pension funds backing Great British companies.

"We will make your pension pot work harder for you. These changes will also shine a light on where your money is invested and give you power to see how well your pension is performing against other funds."

Mr Hunt has received the final set of forecasts that allow him to put the finishing touches to his budget this weekend.

But reforms to pensions are already locked in that are aimed at boosting British business and increasing returns for savers.

New rules will force defined contribution (DC) pension funds to publicly disclose how much they invest in the UK.

Over the last 30 years, there has been a trend to look overseas for places to put fund money despite foreign companies choosing Britain for their cash.

Mr Hunt wants firms to channel their investment into UK firms, particularly after a huge boost in the money they manage following pensions auto-enrolment laws introduced a decade ago that boosted coffers by ￡26 billion.

Under the budget reforms Mr Hunt will announce next week, it will be easier for savers to see where their cash is being invested and what returns they are being given.

Pension funds will be forced to publicly compare their performance data against competitor schemes.

Prime Minister Rishi Sunak hints at another national insurance cut (Image: Getty)

Julia Hoggett, CEO of London Stock Exchange, said: “Pension holders should know how much is being invested in equities in their home market.

“Investing in UK companies ultimately benefits those companies and the returns they are delivering, which supports the economy and the country in which pension holders live, to everyone’s benefit and in everyone’s interest.”

James Ashton, Quoted Companies Alliance chief executive, said: “There is huge upside to aligning the UK’s financial assets with innovative homegrown ventures that could be tomorrow’s world beaters. We welcome these new disclosures and hope they are the first step to many UK pension funds discovering the numerous high-potential companies whose shares are traded on their doorstep."

Mr Hunt is delivering the budget against a tough economic background after the UK went into recession at the end of last year.

As revealed in the Daily Express last month, the Chancellor is considering a 1p cut of national insurance and wants to go further if he can.

It comes on the back of a 2p cut that came into force in January.

Prime Minister Rishi Sunak gave the strongest hint yet that national insurance cuts will be at the heart of the budget on Wednesday.

During a visit to Scotland, the PM stressed his dislike for high NICs rates.

“The Chancellor and the UK Government chose to cut national insurance, there were lots of reasons for that, but first and foremost it is a tax on work,” he said when asked if there could be further reductions announced next week.

“I believe in a country and society where hard work is rewarded – that’s something that’s really important to me … and all the people in the Government, and cutting national insurance is rewarding hard work.”

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Gary Smith, from wealth manager Evelyn Partners, said a 1p cut would amount to an extra ￡74 a year for someone on ￡20,000 a year, ￡274 for someone on ￡40,000, and ￡377 for higher and additional rate taxpayers.

He added: “These amounts would double for a 2p cut, and it’s true that added to the 2p cut that kicked in in January, that would constitute a substantial tax cut, albeit one focused on workers and which will not benefit those who pay income tax but not NIC.

“For many taxpayers, though, snips to NICs either won’t apply or will be fighting against a rising tide of income tax and other direct taxation of capital gains, dividends, business profits and inheritances.”

Latest figures show there are now 33 million taxpayers - an increase of 1.3 million in 12 months.

Tom Clougherty, executive director of the free market think tank, the Institute of Economic Affairs, said the growth has declined for seven consecutive quarters.

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