Speaking on 14 November, Chancellor Reeves underscored the need for a more growth-oriented approach to financial governance and a more efficient system for consumer redress.

Pensions overhaul: introducing “megafunds”

She announced plans to reform the pensions landscape by creating “megafunds” to improve outcomes for savers and boost investment in the UK economy. These funds will pool assets from 86 Local Government Pension Scheme authorities to achieve economies of scale.

The government also plans to consolidate the fragmented defined contribution pension market by setting a minimum size requirement for auto-enrolment schemes and an upper limit for the maximum number of schemes.

The Chancellor also highlighted the disparity between UK and international pension investment, pointing out that Australian and Canadian funds are significantly larger and invest more heavily in infrastructure and private equity, noting that “Canadian teachers and Australian professors reaping the rewards of investing in British productive assets through their pension schemes rather than British savers”.

Regulatory shift: from risk to growth

Chancellor Reeves emphasised the need to balance risk regulation with growth. New growth-focused remits have been issued to key financial regulators, including the Financial Conduct Authority (FCA) and the Prudential Regulation Authority.

The chancellor also addressed the advice-guidance boundary, promising an FCA consultation on changes to improve consumer access to financial help. Additionally, the government intends to simplify the Senior Managers Regime to reduce administrative burdens on firms.

Reforming the Financial Ombudsman Service

The Chancellor also announced changes to the Financial Ombudsman Service (FOS) to make its operations more predictable and efficient. A call for input has been launched to improve the rules governing FOS decisions and strengthen collaboration with the FCA.

These reforms signal a shift in the government’s approach, prioritising economic growth, investment, and consumer confidence. The interim report of the Pensions Investment Review, published alongside the speech, sets the stage for sweeping changes expected in the coming year.