Chancellor Rachel Reeves will deliver her Mansion Speech on Tuesday, laying out her vision for Britain’s financial services sector.
While the focus is expected to be on boosting economic growth and cutting regulation, several of the policies, or the absence of them, could have direct consequences for Britons savings, pensions and tax bills.
Olly Cheng, Financial Planning Director at Rathbones said: "Amid the doom and gloom surrounding the UK economy, mounting pressures on the public purse, and policy reversals on winter fuel payments and welfare reform, the Chancellor’s Mansion House speech presents an opportunity to flip the script – from crisis to confidence.
"The Chancellor could take bold choices with capital markets at the heart to get the economy firing, as well as potential game changing measures relating to pensions adequacy, the advice gap and cash ISAs. If so, this could be a stepping stone to be one of the most consequential budgets for personal finances."
What Chancellor Rachel Reeves could announce in her Mansion House Speech
Pensions: Review of Auto-Enrolment
The Chancellor is expected to announce a review of the pensions auto-enrolment system. Industry sources suggest the Department for Work and Pensions will examine raising minimum contributions, currently set at eight per cent of salary (five per cent from employees and three per cent from employers).
Some pension providers have called for this to rise to 12 per cent, phased in over time. The review will launch before Parliament rises on July 22.
A Government spokesperson said: "We cannot pre-empt the outcome of the review, with no decision being taken relating to pension contributions."
An ally of Reeves said she will announce plans to tear up "reams of financial red tape
PACheng explained the Chancellor may use her Mansion House speech to launch the next phase of the pensions review, focusing on whether people are saving enough for retirement. While auto-enrolment has helped, more action is needed as final salary pensions disappear and individuals bear more responsibility.
Raising contributions could cause some workers to opt out due to squeezed budgets, while employers may face higher costs, potentially affecting jobs. Cheng warns that balancing these pressures is crucial, and although reforms like merging pension pots could help, they will take time.
Regulation: Cutting Financial Red Tape
An ally of Reeves said she will announce plans to tear up "reams of financial red tape" and that she would be "ruthless in slashing rules that make the UK uncompetitive".
Reeves will stress that she will not endanger Britain’s economic "stability", even under pressure from Labour MPs for higher public spending.
According to the same ally, "She will highlight how the government has restored stability as a vital precondition to shaping the economy of tomorrow, supporting four interest rate cuts to drive down mortgage and business lending costs."
Senior Managers' Regime: Major Overhaul
Reeves is expected to accelerate reforms to the "senior managers' regime", accountability rules brought in after the 2008 crash, which the City views as too onerous.
Since 2016, the regime has required senior executives to take personal responsibility if they fail to take "reasonable steps" to prevent misconduct. UK Finance warned the regime has captured "large swaths of people and compliance has become quite burdensome".
Reeves will propose reducing the regime's burden by half, affecting nearly 140,000 finance professionals, and empowering regulators to implement a more "proportionate" framework.
Treasury officials say she will also propose cutting review timelines for senior management appointments from three months to two, and removing pre-approvals for around 40 per cent of appointments.
Many pension experts warn that existing contribution levels will prove insufficient for workers' retirement needsGETTYRegulatory Culture: "Regulate for Growth"
In a bid to reframe the UK’s approach, Reeves will reaffirm her promise to change regulatory culture so it "regulates for growth", not merely for risk.
Cash ISAs: U-turn on Planned Changes
The Chancellor has abandoned controversial plans to cut the tax-free limit on cash ISAs. The proposals, intended to shift savings towards investment products, were dropped after backlash from building societies and consumer champions.
The PA news agency understands that Reeves will instead focus on new plans to provide consumers with the information and support they need to invest.
The Government is expected to continue talking to industry members and others about the options for reform, with a broad consensus that the UK’s savings and investment culture needs to be encouraged.
Fiscal Responsibility and Political Pressure
Following the collapse of her proposed £6.25bn welfare reforms due to Labour MP opposition, Reeves will stress her commitment to fiscal rules and market confidence. She insists day-to-day spending will be funded entirely by tax receipts by 2029–30.
Bond yields surged earlier this month after Reeves appeared visibly emotional in the Commons, sparking market fears of a change in fiscal leadership.
Tax Policy: Concerns in the City
Some in the City worry that Reeves will seek to fill fiscal gaps with tax rises on banks or wealthy individuals, such as increasing the bank levy.
Survation polling found 64 per cent of Labour MPs believe her fiscal rules restrict their ability to improve living standards and services.
Financial Services: Global Competition and Strategy
Reeves will describe financial services as one of eight key "growth" sectors in the Government’s new industrial strategy. She is expected to outline measures to boost the sector's global competitiveness.
Some in the City worry that Reeves will seek to fill fiscal gaps with tax rises on banks or wealthy individuals
GETTYWhat is the Mansion House speech?
The Mansion House speech marks a pivotal moment for Reeves to reassert control over Labour’s economic agenda, reassure markets, and outline a vision of balanced reform and fiscal prudence.
The Mansion House speech is the Chancellor’s annual address to the financial services sector, traditionally delivered at the official residence of the City of London’s Lord Mayor.
It takes place during the Financial and Professional Services Dinner, attended by senior bankers and business leaders, and is widely seen as a platform to signal future regulatory and economic priorities.
At the last appointment, Reeves outlined plans to consolidate the UK’s 86 local government pension schemes into larger, more efficient megafunds. She also pledged to tackle excessive risk aversion in financial regulation, and subsequently wrote to regulators to emphasise the need for a stronger focus on economic growth within their mandates.