Spending Review
Delivering the UK Spending Review earlier last month, the chancellor of the exchequer, Rachel Reeves, increased the British Business Bank’s financial capacity to £25.6bn.
This is expected to enable a two-thirds increase in investments to around £3.5bn each year. This investment, according to the bank, is expected to crowd in “tens of billions of pounds” of private capital and will support the most innovative UK businesses to access the capital they need to scale in the UK.
The government has also confirmed reforms to the British Business Bank’s governance and financial arrangements, which will be implemented by the end of this financial year. These, the bank said, will position it to successfully deliver the increased level of investment activity and will mean it has a new permanent capital base, with greater flexibility to reinvest returns over the long term to increase growth and prosperity in the UK.
The Bank remained in the spotlight later in last month, as the government set out a “modern Industrial Strategy” which pledged £6.6bn to boost growth – a decision described as “marking a major step change in financing to support smaller businesses to start and scale in the UK”.
A new £4bn initiative, British Business Bank Industrial Strategy Growth Capital, will be invested through the bank’s capabilities in eight growth-driving sectors – advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services.
The bank said this scheme would crowd in around £12bn of private capital.
As part of the Spending Review settlement, the British Business Bank will also be committing £2.6bn of capital to support entrepreneurs to access capital, driving the growth of smaller businesses across the UK, including high-growth innovation clusters across the country.
Separately, the Industrial Strategy set out a 10-year plan to boost research and development spending to £22.6bn (€26.4bn) per year by 2029-30 to drive innovation across the eight sectors with the highest potential.
This strategy is expected to unlock finance for innovative businesses, especially for SMEs.
Plans were also published for five sectors, including clean energy industries and advanced manufacturing. A plan for financial services is due to be published alongside the chancellor’s Mansion House speech on 15 July.
IFS pensions review
Ahead of the launch of the second phase of the UK’s Pensions Review, the Institute for Fiscal Studies has warned that millions are at risk of inadequate retirement income due to systemic shortcomings in both state and private pension provision.
The review has highlighted that the current policy settings are “neither delivering value for money nor addressing fairness” across generations. Central to the IFS’s concerns is the sustainability of the state pension – particularly the triple lock – and the inadequacy of private pension savings among key groups, including the self-employed, women, and younger workers.
The institute has proposed a new “four-point pension guarantee” to address this, including an earnings-linked state pension and targeted private pension reform, as well as calling for expansion of automatic enrolment, higher default contribution levels for middle- and high-income earners, and mechanisms to avoid “over-saving” by those on persistently low incomes.
PLSA name change
To reflect the importance of pensions in people’s lives and economic growth, the Pensions and Lifetime Savings Association has earlier this week rebranded to Pensions UK.
Revealing the new name, chief executive officer Julian Mund said: “Pensions matter, both on a personal and a national level. They play a defining role in people’s lives and, increasingly, are playing a defining role in economic growth. It’s a time of great change in the industry, as we embrace these roles, new policies and our importance for wider society.”
He added: “At this organisation, we have set ourselves a clear objective – to make our industry, and our system, ready for the next decade. To reflect that, we will no longer be known as the Pensions and Lifetime Savings Association. We will now be known as Pensions UK.”
Items to note:
- The IPE Conference & Awards 2025 is taking place on 4 December at the Palacio de Congresos de Sevilla in Spain.
Pamela Kokoszka
UK Correspondent
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