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IFoA calls for government to prioritise future generations

The Queen’s Speech, due to be delivered on May 11 2021 at the State Opening of Parliament, will set the tone of the UK’s recovery from Covid-19. The Institute and Faculty of Actuaries (IFoA) believes a long-term view is essential to meet the needs of UK society, without placing an unfair and unmanageable burden on younger, and future generations. In areas such as retirement, climate change, and health and social care, intergenerational imbalances have been noted by the IFoA and, in our view, merit Government action if we are to truly build back better.

IFoA President Tan Suee Chieh said

“The IFoA recognises climate change as one of the greatest risks facing our world today. As well as highly disruptive physical changes, there are significant implications for the entire financial system. We are supportive of the UK Government’s plans to set the world’s most ambitious climate change target into law to reduce emissions by 78 per cent by 2035 compared to 1990 levels – and urge the Government to ensure plans to enshrine the new targets in law are a priority.  

“Pressures on the social care system have been exacerbated by Covid-19 and the NHS is under increasing budgetary strain. This Queen’s Speech must set out a clear strategy and a practical plan for tackling social care in both the short and the long term. Any forthcoming proposals should seek to provide clarity around the level of care provided and who will pay for it.

“We call on the Government to recognise the significance of a trend that long precedes its time in office: the transfer of risks from institutions to individuals as set out in our recent report, The Great Risk Transfer. We believe the Government has a key role to encourage more awareness and proficiency for individuals to manage financial risks. The Government should also actively support alternative structures to redress the balance of risk, such as collective defined contribution pension schemes that pool members’ investment and longevity risks, and supporting the goal to define a minimum level of insurance protection needed for all.

“The Queen’s Speech and the commitments within come at an important moment for the UK. In that context, the IFoA is urging the Government to use the legislative programme to address the implications of long-term trends relating to individual exposure to financial risk and imbalances arising in terms of intergenerational fairness and levelling up challenges. Government must also ensure that economic impacts and risks are shared and managed across society in a way that is fair and manageable for all, particularly across generations.”