The UK government is considering ideas to lower the charge that pension schemes pay into an industry-wide rescue fund, with the goal of freeing up more funds for economic investment. The PPF collects this charge from corporate schemes and uses it to provide a financial cushion to shield employees from potential losses if individual pension schemes fail.
According to government sources, the PPF is in good financial shape, and the government is considering ways to make it simpler to cut the fee. While exact savings have not been announced, the government believes that lowering the charge will free up millions of pounds. This action is part of a larger push to boost economic growth through private investment. Pensions Minister Torsten Bell emphasised the need to modernise obsolete legislation to avoid excessive levies on pension schemes, freeing up funds for investment.
The idea builds on various changes adopted by the Labour government since July to unlock the financial potential of the pension system. This plan is considered a response to Britain’s continued economic issues, namely weak growth and constrained public finances.
Despite increases in company investment, UK levels remain lower than those of key international competitors, according to OECD data.
