Chancellor Rishi Sunak confirmed his intention to relax the DC charge cap on pensions to help encourage more investment into illiquid assets, such as private equity and infrastructure.
This announcement was contained in the detailed statement and papers published alongside Sunak’s spring statement to the House of Commons. It has been known that the chancellor has been keen to encourage greater pension investment into these areas to support the government’s levelling up and green agenda.
Hymans Robertson head of DC investment Callum Stewart says: “This is great news for individual DC pensions scheme members as this will provide attractive opportunities for them to improve outcomes through their DC pension scheme.
“The creation of new long-term asset funds will provide DC schemes with access to investments that could improve returns net of costs and charges over the longer term. As the barriers to accessing illiquid investments ease these will help enable the improvement in these member outcomes. Now is the time to explore this exciting development for those with the governance capacity to do so.”
Another one of Sunak’s key announcements may also support help investment into the green economy, and underlines the government’s commitment to renewable energy. As part of a £9bn package to help homeowners cope with rising energy bills Sunak announced that from April there will be no VAT to pay on those installing solar panels, heat pumps or insulation. All three will remain zero-rated for VAT for the next five years, which should stimulate further economic activity in this area.