Beyond saving(s)?

April 2025

New policy initiatives in the EU and UK aim to promote investment and revive capital markets.

The EU’s latest planned actions are found in the Savings and Investments Union (SIU) strategy, published in March 2025, which aims to encourage investor participation and improve the way the EU financial system channels savings to productive investments. In the UK, although not presented as a holistic strategy, there are similar policy measures on the table.

This article compares EU and UK policy proposals and considers the potential impact for financial services firms.

The European Commission’s proposals on the SIU are set in the context of wider EU goals to facilitate growth and competitiveness – see, for example, the ‘Competitiveness Compass’ and recent policy actions such as the EU’s first ‘Omnibus’ initiative to simplify sustainability reporting requirements. They also build on the EU’s Capital Markets Union (CMU) initiative which was launched in 2015 and subsequently relaunched with a new action plan in 2020.

However, for many, the CMU has failed to achieve its goals. This was reflected in a 2024 report by Mario Draghi which found that EU savings and investments remain fragmented due to the lack of a single securities market regulator, a less unified clearing and settlement environment compared to other leading jurisdictions, and a lack of alignment on tax and insolvency regimes across Member States.

The SIU’s concrete proposals from the Commission aim to get things back on track by progressing decisive actions over the next 18 months.

Following a Call for Evidence, the Commission's latest communication on the SIU sets out how it will take forward specific initiatives. The policy measures are structured around four pillars with specific actions to be taken forward:

1) Citizens and savings

The overall goal is to give retail savers the opportunity to hold more of their savings in investments. There are specific proposals to:

• Create an EU "blueprint" for savings and investment accounts
• Facilitate agreement on the proposed Retail Investment Strategy
• Adopt a financial literacy strategy to create a more "investment savvy" culture
• Increase opportunities for retail investors to contribute to the funding of EU priorities
• Recommend best practices for pension auto enrolment and dashboards
• Review pensions frameworks (for IORPs and PEPPs) with the goal of increasing participation in supplementary pensions.

Comparison with UK initiatives

Several of the EU proposals are clearly influenced by existing UK frameworks and proposals – such as the ISA tax wrapper, auto enrolment regime, and the creation of a regulatory framework for pension dashboards – as well as wider international initiatives.

While the UK’s Consumer Duty has been in force since July 2023, finalising the EU Retail Investment Strategy (RIS) – which has similar goals – has been hard work. Trilogue negotiations have finally started, but, in its SIU communication, the Commission notes that it will withdraw the proposal if the RIS’s objectives are not met.

The UK government confirmed in its Spring Statement that it is considering reforming the existing ISA framework, suggesting that the balance between cash and equities should be adjusted to boost retail investment. This comes not long after the failed proposals of the previous government to introduce a ‘British ISA’ to encourage investment in UK-related companies. Firms across the FS industry are likely to have different reactions to any detailed proposals later this year, given differing alignment with their own product range.

The FCA lost its remit for ‘financial literacy’ on its formation. However, it works closely with organisations such as the Money and Pensions Service and in its latest five year strategy it undertook to support the government as it develops a financial inclusion strategy. The FCA also engages with HM Treasury on policy matters relating to financial capability and debt advice.

Pension auto-enrolment has been rolled out gradually in the UK since 2012. The scheme is generally regarded as successful although there is a debate on whether the 8% minimum contribution is sufficient for a comfortable retirement.

More recently, a Pensions Dashboard Programme has been introduced in the UK with a requirement for pension providers and schemes, within scope of the regulations, to connect to the digital architecture by 31 October 2026. However, the government has not yet confirmed when the dashboards will be available to the public.

2) Investment and financing

To stimulate investment, the Commission will introduce initiatives aimed at improving capital availability and access for businesses, including:

• Adjustments to Solvency II for insurers and guidance for banks and pension funds to stimulate equity investments by institutional investors
• Enhancements to the EuVECA Regulation to make the fund label more attractive
• Support for specific initiatives such as TechEU and the European Tech-Champions Initiative 2.0x
• Removing differences in national tax procedures
• Ensuring that EU listing rules are simple and burdens are minimised (via the Listing Act)
• Proposing measures to support exits by investors in private companies
• Proposals on securitisation (simplifying due diligence and transparency) and adjusting prudential requirements for banks and insurers. The European Supervisory Authorities (ESAs) have already published an evaluation report that should feed into the Commission’s review.

Comparison with UK initiatives

The UK has progressed reforms of the Solvency UK regime and the PRA is currently consulting on allowing additional investment flexibility via the Matching Adjustment Investment Accelerator (MAIA). The UK is also reviewing pensions frameworks with the goal of consolidating pools of capital and increasing investment. In addition, there are wider industry efforts in the UK to increase defined contribution pension schemes’ investment in private assets – most recently through new recommendations released in April 2025.

There has been significant work to simplify the UK’s listing regime with a package of measures introduced in July 2024 that included replacing the UK standard and premium listing share categories with a single category.

The Commission’s proposals on supporting private company exits look set to mirror aspects of the UK’s proposed PISCES framework which is expected to enable intermittent trading of private company shares using a common market infrastructure for the first time. 

For funds, in contrast with the EU’s introduction of new requirements for AIFMs and UCITS Man Cos from April 2026, the UK is consulting on reforming and streamlining aspects of the UK AIFMD regime.

The UK has reviewed and updated the onshored EU Securitisation Regulation (SR) during the process of moving the firm facing provisions from legislation into the regulators’ rule books. The updates, which came into force in November 2024, largely preserve the existing requirements but bring clarity to a targeted number of provisions of the UK SR. The FCA and PRA are planning a second consultation to review the definition of public and private securitisations and the associated reporting regime.

3) Integration and scale

The Commission plans to reduce inefficiencies stemming from fragmentation to remove any regulatory or supervisory barriers to cross-border operations of market infrastructures, asset management and distribution of funds. Initiatives include:

• A dedicated channel for firms to report on barriers within the Single Market and stepping up enforcement action to accelerate their removal
• Legislative proposals on Central Securities Depositories, collateral, settlement and on trading market structure to remove barriers, modernise frameworks and improve execution and price formation on venues
• Legislation to remove barriers to the distribution of EU-authorised funds across the EU and measures to reduce operational barriers affecting cross border asset management groups
• A potential review of the Shareholders Rights Directive to make it easier for investors, intermediaries and issuers to operate across the EU.

Comparison with UK initiatives

No similar initiatives are planned in the UK as such cross-border challenges no longer exist.

4) Efficient supervision

The Commission aims to ensure all financial market participants receive similar treatment, irrespective of their location in the EU – via convergence tools and reallocation of supervisory competences between national and EU levels:

• the ESAs and National Competent Authorities are to make full use of existing tools and to implement the simplification agenda
• measures to strengthen supervisory convergence tools to make them more effective
• proposals to achieve more unified supervision of capital markets as indicated in the EU's Competitiveness Compass, including by transferring certain tasks to the EU level.

Comparison with UK initiatives

As above, the UK no longer has the same challenges in this context. There have been efforts from UK regulators to increase their regional presence, such as the FCA’s recent expansion of its Leeds office.

The EU’s proposals to transfer certain supervisory tasks from Member States to EU level (for example, ESMA) are likely to debated intensely. This is particularly likely to be the case for leading fund management centres such as Luxembourg and Ireland – whose local supervisors may be reluctant to cede control to other bodies.

5) Banking union

In addition to progressing the four core pillars of the SIU, the Commission revealed plans for the banking union, including:

• Inviting the European Parliament and Council to address shortcomings in arrangements to manage the failure of mid-sized banks
• Following-up with "decisive steps" to develop the Banking Union further (e.g. proposals on the European Deposit Insurance Scheme).
• Publishing a report assessing the EU banking and its competitiveness
• Continuing to assess developments in banking markets whenever financial stability is threatened.

Comparison with UK initiatives

Again, as above, there are no comparable challenges in the UK.

The SIU communication is useful as it sets out the concrete proposals the Commission will be bringing forward in the short term, and further detail on how it will work together with Member States. The content of the communication is largely aligned with similar developments in other jurisdictions such as the UK, where there is currently a similar focus on regulating for growth.

It remains to be seen whether the SIU can deliver progress where the CMU initiative could not – particularly given the tight timeline and existing work planned by the Commission and the ESAs. Some of the proposals are likely to require careful thought and negotiation in their delivery, particularly those around centralising supervisory responsibilities.

There is now also a question about whether the current geo-political environment and shifts on trade policy could undermine all these initiatives in both the EU and UK – or whether it makes them more important than ever in the longer-term.