General Election 2024: our key insights

With a busy night of counting over and the results of 2024’s General Election announced, BW experts from across the spectrum of pensions, investments, insurance, wellbeing and benefits, share their insights on the implications of the incoming Labour Government’s policies.

"The UK election outcome has so far had minimal impact, given it’s been predicted in the polls for some time so was largely priced into markets"

Matt Tickle, Partner and Chief Investment Officer

"Yesterday’s general election has produced a substantial majority for Labour, which is expected to result in the largest majority achieved by any UK Government since 1935. This outcome has been predicted in the opinion polls for some time and therefore was already largely priced-in to markets. As markets opened this morning; UK gilt yields, UK equities and the sterling exchange rate have remained largely unchanged.   

Not every election is such a forgone conclusion. The French National Assembly election had its first round on 30 June and will have its second round on 7 July. In the first round, Marine Le Pen’s National Rally emerged as the largest party as expected, but the two round system makes the outcome difficult to predict. French yields have risen over fears that National Rally could win a majority and some volatility, potentially large enough to impact global yields, is likely on 8 July as the results become clear."

"The new Government should reform the PPF levy, establish legislation for capital-backed consolidators, and prioritise overdue pension initiatives"

Steve Hitchiner, Partner and Senior Actuary

"One priority for the new Government should be reform of the levy that is payable for the existing PPF compensation scheme.  The current legislation is no longer fit for purpose and is causing the PPF to collect hundreds of millions from levy payers that it no longer needs.   

We would also encourage the Government to introduce a legislative regime for capital-backed consolidators. While interim guidance from The Pensions Regulator (TPR) has allowed the first such transactions to be completed, a proper framework is still needed for these vehicles, and would provide greater confidence to trustees who believe them to be in the best interests of their members. 

On a wider point, new governments often lead to industry calls for wide-ranging reviews of pension policy, or the establishment of pension commissions.  However, I would be against such proposals.  There are already a significant number of important initiatives that are long overdue (e.g. DB funding, pensions dashboards, auto enrolment amendments, CDC regulations) and any wide-ranging policy review will inevitably lead to further delays in these areas." 

"The new Government may aim to unlock £1.5 trillion in DB pension schemes, merging smaller funds and investing in UK infrastructure and markets"

Richard Gibson, Risk Transfer Partner

"By far the biggest prize for any Chancellor looking to get assets working for the UK economy is the nearly £1.5trillion locked up in private sector defined benefit (DB) pension schemes. The near-term focus of the Mansion House reforms is on defined contribution (DC) pensions, but Labour’s manifesto is clearly committed to pursuing the plans first proposed by the Tony Blair Institute, to bring together hundreds of the smallest private sector DB pension schemes into a single fund, backed and overseen by the public sector. 

This is a sensible strategy. Those schemes could deliver economies of scale and improve asset returns. Many pension schemes are already doing this and will move over £200 billion to the buy-out insurance market over the course of the next parliament. If the new Government really wants to plan ahead, it must look at how insurers can use that capital for long-term infrastructure and investment in UK markets." 

"The Government must prioritise getting existing defined benefit pension initiatives over the line – to provide certainty and improve outcomes for all stakeholders"

Tyron Potts, Associate and Head of Pensions Research

The Government must address the key issues for occupational defined benefit schemes left hanging when the General Election was called. Priorities include ensuring the regulatory Code of Practice for the new funding regime gets appropriate and swift parliamentary billing; and that the industry’s feedback on proposals for returning surplus assets to sponsors and members is developed into coherent policy.  

These measures would provide certainty for scheme sponsors and trustees, potentially improve outcomes for members and support UK economic growth.

The new government should also focus on other existing regulatory initiatives like the expansion of Collective Defined Contribution legislation to incorporate multi-employer arrangements, and ensuring that Pensions Dashboards successfully meet the needs of scheme members – and pension providers – from the outset, and without further delay.

"A newly appointed female Chancellor could drive workplace equality, employee benefits and fairer pay"

Melissa Blissett, Senior Consultant and Pay Gap Analytics Lead

“The new Government sees a woman holding the position of Chancellor for the first time in UK history. With a promised fair pay manifesto pledge this could be the catalyst needed to shift the stagnant reduction in the gender pay gap seen in recent years.  

For employers, we are expecting a mandatory requirement for clear pay gap action plans, an expansion into ethnicity and disability reporting and a wider focus on policies that support women in the workplace, enhancements to flexible working and childcare support. 

We are interested in the opportunity this has for employers to rethink and reshape their workforce ethos and policies, and enhancing their use of data analytics. Reducing gender, ethnicity and other pay gaps is not only good for employees but could unleash an enormous economic benefit and productivity of workers who are currently working below their skill sets." 

"Workforce wellbeing, retirement, healthcare and young people's mental health should be prioritised, not just health and protection offerings"

Riaan van Wyk, Senior Wellbeing Data Consultant

“The focus of the new Government should not be solely on health and protection products and supports. Instead, a radical shift is needed towards a more grassroots and back-to-basics approach. 

They need to deal with a two-pronged issue. Firstly, an aging workforce that is not adequately prepared for retirement, leading to healthcare issues within the workforce. This problem could be exacerbated by bias and discrimination in the workplace. Employers need to ensure they have adequate insurance and policies in place, the issue needs to be addressed before it escalates into a larger problem. 

Secondly, they need to tackle the challenges faced by the younger generation, particularly in the wake of Covid-19. Flexible working and lack of social interaction in the workplace have led to an increase in mental health issues. The Government needs to acknowledge these real problems and support businesses in tackling these issues. A smarter approach is needed, one that acknowledges where the real issues are and addresses them before they become problems. 

Unfortunately, there is no fresh indication of these issues being addressed in any of the parties’ manifestos. The same old stories persist, and promises made have not come to fruition, particularly in relation to workers’ rights."