The recent Spring Budget contained few surprises for the pensions industry, with many of the measures having either been announced prior to Budget Day and/or building upon the Mansion House reforms.

As expected, key themes were aims to increase investment in UK businesses and improve outcomes for pension savers. We summarise the key takeaways for the pensions industry below.

Mansion House Compact

In last year's Mansion House speech, the Chancellor announced a commitment by nine of the UK's largest Defined Contribution (DC) pension schemes to increase their investment in UK unlisted equities – the Mansion House Compact. Further DC schemes have since signed up, each of which are asked to allocate at least 5% of assets in default funds to unlisted equities by 2030.

The Spring Budget confirmed that the UK Government and the Association of British Insurers are now close to completing a framework to monitor progress by the relevant schemes, although it's not yet clear when this will be finalised or published.

Investment disclosures

As part of the drive to boost UK investments, the Chancellor announced that all Defined Contribution (DC) pension funds will need to publicly disclose how much they invest in the UK by 2027, as well as their costs and net investment returns.

It's expected that the UK Government will use the data to assess whether pension funds' UK investments are increasing and if any further action is required. However, the Financial Conduct Authority will first need to consult on the measures – expected to form part of the Value for Money (VFM) Framework consultation in Spring 2024.

Equivalent requirements are expected to be introduced in April 2024 for Local Government Pension Scheme (LGPS) funds. It's not clear if this relates only to LGPS funds in England and Wales or if LGPS funds in Scotland will be captured, too. We will keep you updated as more information becomes available, including as regards whether the Scottish LGPS will be introducing similar requirements.

Value For Money Framework

In a move to introduce a strategy that is similar to one that's been successfully implemented in Australia, pension funds will also need to publish a comparison of their performance data against competitor schemes, including at least two schemes managing £10 billion in assets. As part of the proposed VFM Framework, both the FCA and the Pensions Regulator will gain new regulatory powers to close schemes to new entrants where the scheme is performing poorly, and where necessary, wind up a scheme.

The criteria for poor performance is still to be ironed out, with benchmarking proposals expected to be covered in the FCA's upcoming consultation. So, although the UK Government has indicated it will legislate as soon as possible to bring the Framework into operation, this will depend on the outcome of the consultation.

Lifetime Provider Model

In the Autumn Statement, the Chancellor announced a call for evidence on whether a lifetime provider model would improve outcomes for savers. We're still awaiting the UK Government's response to the call for evidence, but the Chancellor confirmed in the Spring Budget that the UK Government still intends to explore a lifetime provider model, reporting that it will carry out 'further analysis and engagement' to ensure the model would result in improved outcomes for pension savers. Some have suggested that the Government may be reconsidering its plans, but it's likely we will know more once the UK Government's official response is published.

We will continue to provide updates as developments arise. In the meantime, if you would like to discuss anything raised in this blog in more detail, please get in touch with a member of the pensions team or your usual Brodies contact.


Juliet Bayne


Jennifer Crawford

Senior Associate

Lauren Smith

Trainee Solicitor