Long-term repercussions for insurers from the 2025 budget

The markets responded positively after Rachel Reeves released her much-anticipated budget: gilt rates fell, and the pound strengthened after the Chancellor announced plans to increase fiscal headroom by £22 billion, funded through higher taxes.

UK Life insurers, due to their sizable positions in government bonds, will likely be pleased by the boost in the fiscal stability of the government.

And while some investors responded positively, others pointed to long-term concerns which might affect insurer portfolios. So, what are these concerns?

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