Chancellor Rachel Reeves is facing mounting pressure to launch a review into the state pension as part of tomorrow's (July 15) Mansion House addresss.
She is expected to deliver bold reforms when she unveils the Financial Services Growth and Competitiveness Strategy during her speech..
The urgency for action has intensified following ONS figures showing the economy contracted for the second consecutive month, shrinking 0.1 per cent in May and 0.3 per cent in April.
Financial services leaders are banking on the Chancellor to deliver transformative measures after months of consultation with the Treasury. "This week, the industry will want to see a strategy that sets out bold ambition with clear priorities to unlock this growth," said Karim Haji, global and UK head of financial services at KPMG.
Analysts are urging the Chancellor review the state pension
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Despite the economic headwinds, research from KPMG reveals that more than 80 per cent of financial services leaders remain confident the government's plans will stimulate growth across the sector and attract foreign investment.
The Treasury has been actively courting the industry for input into its inaugural strategy, raising expectations for tomorrow's announcement.
"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," said Olly Cheng, financial planning director at Rathbones.
Retirement industry experts are urging specific reforms to revitalise economic growth and overhaul the pension sector.
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How much will the state pension triple lock cost the British taxpayer? OBR Glyn Bradley, the chair of Pensions Board at the Institute and Faculty of Actuaries, called for comprehensive changes to the state pension status quo.
Bradley said: "It is now time to review the workplace and state pension frameworks, including for the self-employed, and more importantly to make some decisions on how to help UK pension savers achieve a comfortable retirement."
The IFoA is advocating for guided retirement products to help individuals draw down their pensions, including 'retirement only' collective defined contribution schemes.
Cheng emphasised that Reeves has the opportunity to make "bold choices with capital markets at the heart to get the economy firing" and implement "game-changing measures".
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Chancellor Rachel Reeves faces tough questions next month when she announces the Government's priorities for the next three years in a much-anticipated spending review GB NEWSHowever, speculation is mounting that crucial reforms may face delays.
According to the Financial Times, changes to cash ISAs are reportedly set to be paused, despite Treasury hopes that reforms could drive consumers from cash ISAs into stocks and shares ISAs, injecting more liquidity into markets.
Bradley also highlighted the need for immediate action on pensions advice uptake, suggesting improvements to government services like PensionWise and allowing people to pay for advice from their pension pots.
"Finally, a pensions adequacy review needs to think about pensions in a wider world," he said, calling for enhanced provision of information, advice and guidance throughout working life.