IFoA urges Chancellor to support long-term green growth

10 March 2023

Ahead of the Spring Budget, due to be delivered on Wednesday 15 March, the Institute and Faculty of Actuaries (IFoA) is urging UK Chancellor Jeremy Hunt to ’go for green growth’ in the race to net zero.

IFoA President Matt Saker, said:

“The UK has an opportunity to become a world leader on climate-related finance but we need a supportive policy environment in place to do so. We call on the Chancellor in this Spring Budget to set out a framework for Solvency UK investment to support green innovation and encourage more investment in long-term renewable energy infrastructure. Actuaries are well-placed to understand the complexities of the changing Solvency UK regime and help to balance those with the long-term strategy around clean energy investment.

“We look forward to the revised Green Finance Strategy due out later this month. We also hope for greater clarity for companies and investors around what is considered a ‘sustainable’ activity when the delayed UK Green Taxonomy is published. Together, these are two crucial planks in the wider policy framework that will help accelerate green finance and support the UK’s transition to a net zero economy”.

Commenting on the state pension age and the pension triple lock, Matt Saker said:

“We hope this budget will provide some clarity on how the government will strike a balance between ensuring that State Pension provision protects pensioners from poverty and remains sustainable over the long term. Increasing longevity has been the driving force behind previous rises in the state pension age and before considering accelerating any planned increase, the government must reassess longevity trends including healthy life expectancy. If, as expected, advances for life expectancy are slower than initially predicted, raising the State Pension Age forward at a quicker rate could have a detrimental impact on the younger generation.

“The forthcoming publication of two key reports on the state pension age, from the Government Actuary’s Department and from Baroness Neville Rolfe, will provide important data-driven considerations for the future of the state pension.”

"The government must also consider the role of the pension triple lock. The triple lock has been an important tool in the last decade in helping to tackle pensioner poverty but may now threaten the overall sustainability of the state pension for future generations. The IFoA supports the recommendation in the 2019 Lord’s report on intergenerational fairness to remove the triple lock and move to a system where the State Pension is up-rated annually in line with average earnings.

“The IFoA is keen to encourage policy decisions which provide a stable environment for people to save for the long term through a pension, and which remove unnecessary barriers or disincentives to doing so.”