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ABI Champion Regulatory Improvements to Empower Savers and Fuel UK Investment

Insurance professionals are urging crucial regulatory improvements to create an environment that prioritises the interests of savers and attracts significant investment in the UK economy. The Association of British Insurers (ABI) has released a report titled "Investing in our Future: Delivering for Savers and the Economy," which highlights key recommendations for regulatory enhancements.

The ABI emphasises the need for a comprehensive, long-term strategy that places savers at the forefront of investment efforts, ensuring better outcomes for pension savers. The report identifies several essential regulatory improvements:

Firstly, building on the triumphs of the Long-Term Investment for Technology and Science (LIFTS) initiative, the ABI urges the government to seize this momentum and expand its scope. By further encouraging investment in key sectors, the UK can establish itself as a global leader in innovation and progress.

Secondly, the ABI passionately insists on streamlining regulations to facilitate investment in illiquid assets. This entails creating a framework that enables effortless investment in Long-Term Asset Funds (LTAFs), unleashing the full potential of illiquid assets known for their long-term growth and stability. This exciting opportunity could pave the way for savers to access remarkable returns and seize the benefits of patience and foresight.

Thirdly, a resolute transformation of the culture in the Defined Contribution (DC) market is crucial. Shifting the narrative from a "cost is king" paradigm to one that cherishes value for money will empower pension schemes to explore innovative avenues. By embracing alternative assets, such as private equity and venture capital, savers can witness the true potential of their hard-earned investments.

Finally, the ABI ardently calls for the implementation of incentives and supportive regulations that foster an environment where pension schemes thrive. By crafting a market that entices both domestic and foreign investments, the UK can position itself as an irresistible destination for capital inflow, benefitting savers and fortifying the broader economy.

These regulatory improvements, which the ABI champions wholeheartedly, are pivotal in safeguarding savers' interests while forging a prosperous future for the UK. By placing the needs of savers at the forefront, the government can cultivate an environment that nurtures the growth of pension schemes, empowering them to allocate funds responsibly and effectively.

The ABI also applauds the emergence of Long-Term Asset Funds (LTAFs) and stresses the need for streamlined regulatory frameworks. Collaboration between the Financial Conduct Authority (FCA) and the industry is essential to ensure that investment rules do not hinder firms from exploring unique opportunities, including the ambitious LIFTS scheme proposed by the government.

Furthermore, the ABI adds its personal touch to the narrative, underscoring the importance of transitioning from a narrow, cost-centric mindset to a holistic, value-oriented approach in the DC market. Recent consultations on value for money frameworks indicate a significant step in the right direction, but the ABI urges regulators and the government to fully embrace this shift. By updating guidance from the Pensions Regulator (TPR) and the Department for Work and Pensions (DWP), trustees can be empowered to make investment decisions that prioritize the overall value for savers. The integration of the value for money framework into TPR and DWP's default fund guidance will herald a new era of prudence and efficacy.

In conclusion, the ABI's report exemplifies insurance professionals' unwavering commitment to secure savers' standards of living in retirement while igniting economic growth. By fostering an attractive investment market and implementing incentives for pension schemes, the UK can become an unrivalled hub of prosperity. With a personal touch, the ABI pledges to actively engage with stakeholders, leaving no stone unturned, to ensure the successful implementation of these long-term regulatory enhancements. By empowering savers and fuelling UK investment, the ABI envisions a future where financial security knows no bounds and the economy thrives with unparalleled vitality.

As the government looks to spur economic growth, attention has turned to whether pension savings can channel more money into UK companies. While pension schemes do already invest a great deal in the UK, the litmus test for any new policies must be that they deliver better outcomes for savers.


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