Chancellor Rachel Reeves has announced a raft of financial services reforms in her Mansion House speech this evening to boost economic growth and shake up the retail investment market.

She called the measures her, 'Financial Services Growth and Competitiveness Strategy'. It includes the 'Leeds Reforms' announced earlier today.

In her Mansion House speech this evening (15 July) the Chancellor said financial services should be an economic powerhouse driving growth in the UK.

Some of the changes have already been outlined in the so-called ‘Leeds Reforms’ earlier today.

In her speech this evening she provided more details. Among the regulatory and retail investment changes planned are:

Major reforms

• An ‘absolute limit’ of 10 years for claims to the Financial Ombudsman Service to speed up the time consumers get redress for their complaints and returning the FOS to its “original purpose” as a simple arbitration service rather than being a “quasi regulator.”

• The FOS in future will be more closely aligned with the FCA rulebook, she said.

• The FOS will cut the interest rate it applies before a decision from 8% to base rate plus 1%.

FCA Reforms:

• New targets for the FCA and PRA to cut times for authorisations and approval and a review of the Consumer Duty to see whether it “unduly affects wholesale activity" and to ensure that regulators are "really regulating for growth.”

• Streamlining the Senior Managers and Certification Regime and reducing the burdens it imposes on firms by 50% and slashing approval timeline

Targeted Reforms

• For asset management she plans reform of the regulatory regime with draft legislation in early 2026 but she has axed plans to pursue a green taxonomy. Instead she will work through the Transition Finance Council to capitalise on the ‘£200 billion opportunity’ of the global transition to net zero.

• To boost fintech the PRA and FCA are launching a ‘scale-up’ unit to support innovative firms to grow in the UK, including in the ‘world-leading’ payments sector.

• There will also be tokenised securities and stablecoins measures and an ‘ambitious design for the new digital gilt instrument.’

• There will be a new Office for Investment’s concierge service launching in October to provide a tailored service to companies considering setting up and expanding in the UK.

Capital requirements

• UK banks will be allowed do more lending and release more capital for investment in infrastructure and businesses. 

Retail investment

• She recognised the recogised the potential for ISA reform to improve returns for saver and “access to capital for UK businesses.”

• She will allow Long-Term Asset Funds to be included in stocks and shares ISAs.

• There will be consideration of further changes to ISAs over the coming months although, as reported, no mention yet of changes to Cash ISAs.

• She wants investing to be presented in a more positive light “giving proper weight to the benefits"

• She criticised, “our tangled system of financial advice and guidance” and said brand-new type of “targeted support” - recently outlined by the FCA - would help consumers ahead of the new financial year.

• She also plans to back a campaign to promote the benefits of retail investment which will launch next April and thanked Chris Cummings of the Investment Association for, “spearheading both of those initiatives.”

Pensions

• She said she had a duty to maximise the potential of people’s pension savings and the new Pension Schemes Bill would “reserve the power” to mandate pension funds to invest productively in a wider range of assets but added that she was “confident” she would not need to use the power. Recently Bank of England Governor Andrew Bailey questioned the move to mandate pensions to invest in certain types of investment or being forced to invest in the UK.

• Ms Reeves said funds covering the majority of the Defined Contribution market have committed to the Mansion House Accord and already pledged to invest at least 10% of their main funds into private assets such as infrastructure and growth markets, with at least half of that going into the UK.

She said: “The financial services sector is critical to my ambitions for our country. It is one of the largest and most productive sectors in the UK worth around 9% of total economic output and supporting 1.2 million jobs in clusters across the UK.

"In Cardiff, Belfast and Edinburgh where we have growing fintechs; In Manchester, where BNY Mellon have their new Angel Square hub and in London, the financial centre of the world.”