The Budget speech mentioned pensions a few times, but not in the dramatic way that some in the industry have come to expect and fear – more in the context of UK growth than savers’ retirements.
Most of the mentions were of initiatives we’re all already aware of: the Mansion House reforms and the possibility of more choice over where our workplace pension savings end up.
The chancellor reconfirmed that work will continue on developing the lifetime provider pension model, or 'pot for life' as it has come to be known.
Despite concern from some quarters of the pension industry that this is the wrong solution to the problem of multiple lost pension pots throughout someone's career, it appears the government continues to see merit in it (and so does PensionBee).
The chancellor said that a further update, following more feedback and analysis work after the closure of the initial consultation, would be forthcoming.
Some commentators suggested this sounded like a softening of language.
In fact, the continued mentioning of the proposal suggests there remains some conviction around it.
It might be easier to implement than some are expecting, given that technically people are already able to ask their employers to pay into the pension of their choosing. It's just that few do and even fewer employers currently say yes.
So while as a large-scale, official solution a lot of new infrastructure needs to be in place, in terms of making it happen on an individual level for those that want their own pot for life now, it shouldn’t be too onerous for employers to implement.
It might also be a less dramatic initial change to industry processes than many are expecting, if, as is most likely, people don't en masse suddenly demand their work contributions go elsewhere, but instead continue as they were, until such a time as having a choice of pension provider becomes relevant to them.
It was pleasing to hear the chancellor's emphasis on the phrase ‘value for money’, rather than driving down costs.Fears of monstrously high marketing costs and lower income earners being left abandoned in poorer value schemes are probably overdone.
There could even be cost savings, partly from greater competition, as well as further efficiencies to be made, under a system where individual savers and not employers are the primary client of providers.
Additionally, the mention from the chancellor of more transparency around asset allocations from defined contribution pension providers was welcome.
This was an update on Mansion House reforms.
What it leads to ultimately is another question, but it's difficult to argue with a move towards more daylight being cast on where pension savers' money ultimately ends up, and crucially, whether they are getting value for money.
This may reveal no more than what we already know: around 6 per cent of the average pension fund is invested in the UK and when it comes to UK equity holdings, the same few will be repeated, with AstraZeneca and Shell at the top of the lists.
But it will give the government plenty of opportunity to look for improvement in terms of where higher growth, UK-based opportunities might be found.
It was also pleasing to hear the chancellor's emphasis on the phrase ‘value for money’, rather than driving down costs.
A two-dimensional focus on fees is not where work on defining what constitutes value for money appears to be headed.
The twin-mention, in the same breath, of The Pensions Regulator and the Financial Conduct Authority working together on this was also encouraging, because really what would help a lot is one regulatory regime for all pensions.
The coming together over value for money may be the start of a wonderful amalgamation.
Fears of monstrously high marketing costs and lower income earners being left abandoned in poorer value schemes are probably overdone.The problem with running an initiative on value for money at the same time as an initiative to disclose performance and asset allocation by geography of UK pension funds may be that it could reveal, perhaps, that British investments haven't performed so well and therefore nor have they offered value for money.
That's a risk the chancellor must be willing to take, if it means turning the industry down the road to doing even better for savers – and the UK.
The idea of a British Isa, where investors are incentivised with a further £5,000 a year tax allowance to invest in the UK, might set a precedent for an approach of offering a carrot to invest in the UK for those that choose, individually, to do so with their own money.
This is in stark contrast to mandating pension funds to invest a certain proportion of our retirement savings to the UK and a far more pleasingly individualistic approach.
It might be that very few people ultimately go for it. If that’s the case, we’d have an interesting test case to demonstrate why there might not be demand for a higher proportion of savers’ money to go towards British businesses through their pensions.
Becky O'Connor is director of public affairs at PensionBee
