Key highlights of Labour’s pensions review, the Covid loan abuse scandal continues to be tackled, plus information on how to defend your business from phishing attacks
The recent King’s Speech contained details of a landmark review set to boost pensions and investments, we discuss the key highlights to enable you to see a snapshot of the proposals. Work continues to tackle Covid loan abuse with directors being disqualified and criminal charges being processed. Plus, we signpost you to NCSC guidance on how to protect your business from phishing attacks, following the recent CrowdStrike outage.
Chancellor Launches Landmark Review to Boost Pensions and Investment
The Chancellor, Rachel Reeves, has announced a significant review aimed at enhancing pension investments, increasing pension pots, and reducing waste in the pensions system. The review was highlighted in the King’s Speech, confirming a new Pensions Bill that could significantly benefit UK pensioners and the broader economy.
Here’s an analysis of what the review could mean.
Key Highlights of the Pensions Review
- Boost to Pension Pots: The new Pensions Bill has the potential to increase pension pots by over £11,000 for savers in defined contribution schemes. The bill also emphasises further consolidation and broader investment strategies to deliver higher returns.
- Economic Impact: An investment shift in defined contribution schemes could introduce £8 billion of new productive investment into the UK economy. The review will also look at how to unlock the investment potential of the Local Government Pension Scheme (LGPS), which manages £360 billion in assets and is the seventh largest pension fund in the world.
- Reducing Fees: The review will address the £2 billion annual expenditure on fees within the LGPS, aiming to cut down on waste and improve efficiency.
Industry support
The announcement has received strong support from various industry leaders: For instance, António Simões, CEO of Legal & General Group, welcomed the initiative, noting that driving pensions capital into areas like science and infrastructure can support better returns for savers and stimulate long-term economic growth.
Timing
The first stage of the review will report in the next few months and will look at further measures that can support the proposed Pensions Bill.
The Chancellor’s landmark pensions review aims to unlock significant investment into the UK economy while enhancing retirement outcomes for millions of pension savers. The review should bring good news for pension savers, but we watch to see whether good intentions can turn into secure retirements for all.
Insolvency Service continues to tackle Covid Loan Abuse
The recently released Insolvency Service’s 2023-24 Annual Report and Accounts provides some interesting information on how the Service is doing in tackling Covid loan abuse.
The report identifies that 831 directors have been disqualified for abusing Covid loans. 22 criminal prosecutions have been carried out, and efforts have been made towards recovering nearly £3 million for the taxpayer.
In addition, the Report shows other more general enforcement work has been carried out. Including that a total of 1,222 directors were disqualified for various forms of misconduct. 139 live company investigations were conducted during the year and 45 companies were ordered to wind up for acting against the public interest.
The Insolvency Service were also able to return nearly £60 million to creditors, marking an increase of almost £15 million from the previous year.
Dean Beale, the Chief Executive of the Insolvency Service, expressed pride in the agency’s accomplishments. He said:
“This year’s Annual Report showcases how we are strengthening the insolvency regime to ensure it works effectively for all its stakeholders, whilst at the same time we continue to provide excellent service for all our customers. Our insolvency framework is rightly regarded as one of the best in the world and we want to maintain that reputation, keeping pace with the way people manage their affairs in today’s environment.”
See: https://www.gov.uk/government/news/insolvency-service-continues-hard-work-to-tackle-covid-loan-abuse
Nine out of ten small employers concerned about new legislation
The King’s Speech detailed proposals for a number of areas of new legislation that are likely to affect small employers.
The Federation of Small Businesses (FSB) subsequently reported that nine-in-ten employers surveyed by them had said they have concerns that the costs and risks associated with employing people would be increasing.
The FSB also noted that there was no legislation announced to tackle the poor payment practices of big businesses toward their small suppliers. FSB Policy Chair Tina McKenzie said late payment “hampers cashflow and stifles investment, and we call on the Government to look again.”
See: https://www.fsb.org.uk/resources-page/fsb-weekly-brief-newsletter-friday-19-july-2024.html
IT outage causes significant global disruption
On Friday 19th July there were significant IT outages affecting businesses across the globe. The outage primarily affected businesses that use security software from a company called CrowdStrike. A recent update to their antivirus software contained an error that caused issues in the systems of many of the world’s leading businesses.
The National Cyber Security Centre (NCSC) has confirmed their assessment that the outages were not the result of a security incident or malicious cyber activity.
They have also encouraged affected businesses to apply the fix that has already been issued. Their statement also encourages businesses to continue installing security updates, saying that this is still an essential security practice.
NCSC have also reported that an increase in phishing that refers to the outage has already been seen. These may be aimed at organisations or individuals. Therefore, businesses would do well to help staff be particularly alert with their emails over the next few weeks.
NCSC guidance on how to defend your business from phishing attacks can be found here: https://www.ncsc.gov.uk/guidance/phishing