PENSION SAVERS TO GET ACCESS TO TOP CITY MONEY MANAGERS
Pension savers will be able to access to top City money managers under pro-growth reforms being considered by the City watchdog.
Nikhil Rathi, the chief executive of the Financial Conduct Authority (FCA), said in a letter to Sir Keir Starmer, the Prime Minister, that the regulator planned to overhaul a cap on pension management charges to potentially exclude performance fees.
Such fees are only payable to an investment manager if they generate high returns on their investments and are often found in markets like venture capital.
The annual pension charge cap currently stands at 0.75pc of assets and the inclusion of performance fees has long been considered a barrier for defined contribution pension schemes accessing high-performing funds.
In 2023, the cap was changed for some pensions and the City watchdog is considering rolling out these changes more widely.
The proposal is part of a package of reforms being looked at by the FCA to boost growth, amid pressure from the Government on watchdogs to help kickstart the economy.
Mr Rathi said that the FCA would also seek to speed up applications by companies to list on the London Stock Exchange and prioritise lending to small businesses when it relaunches the “open banking” push to widen access to financial data.
Supporting the development of UK-issued stablecoins and finalising rules around digital assets will be among its priorities in 2026 and Mr Rathi said the FCA planned to further overhaul mortgage rules to make it easier for people to get on the housing ladder.
In his letter, he said that the FCA had delivered on the “vast majority” of the nearly 50 pro-growth measures that it set out in January, which included removing the £100 contactless payment limit for some businesses.
Mr Rathi added: “We also want to use our convening power to galvanise a system-wide response to issues which touch our remit but involve other partners, be that financial inclusion or mobilising defence investment to protect our national and economic security.”
The watchdog separately confirmed that new rules allowing companies to provide generic financial advice to groups of customers come into force next April.
The move will mean that investment platforms and other companies could, for example, tell customers sitting on too much cash that investing the money in shares would provide better returns over time.
In a separate letter to the Prime Minister, Sam Woods, the chief executive of the Prudential Regulation Authority (PRA) – the part of the Bank of England that oversees the stability of large banks – also pledged to cut red tape for the sector.
Mr Woods, who is due to step down next June, said that the PRA had delivered on four of the five reforms he had set out at the start of the year, with more work to be done in cutting regulatory reporting requirements for banks.
2025-12-11T07:30:40Z