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EU ministers have nodded to support for nuclear energy for the first time as part of the bloc’s mandate for the UN climate summit, in a sign of atomic power’s rising prominence as an energy source.

Deep divisions between France and Germany held up the discussions over the EU’s negotiating stance for the COP29 gathering, but EU countries ultimately agreed that they should call to accelerate “low-emissions technologies” in line with a deal made at the previous COP28 summit that included nuclear power.

The push for more recognition of nuclear energy symbolises a shift in attitudes towards the power source in Europe, which were hardened against it following Japan’s Fukushima nuclear disaster in 2011.

A group of mostly eastern European countries and France will publish a paper on Tuesday calling for Brussels to recognise the “pivotal role” of nuclear energy and ensure it is “duly integrated” in new proposals for EU energy regulation.

On the sidelines of the meeting on Monday, the Dutch and French governments also signed an agreement to increase co-operation on nuclear energy and push for more “institutional support” for nuclear power.

But several EU countries, including Germany, Austria and Denmark, fear that too much focus on nuclear could draw funds away from renewable energy as a cheaper, cleaner and faster way to cut the greenhouse gas emissions behind climate change.

“We see that nuclear has been kept alive by enormous amounts of public money without having an economically viable business model, while at the same time we see renewables costs decrease enormously,” said Leonore Gewessler, Austria’s climate minister. “Let’s put money where the most cost-efficient solution is — and that‘s renewables.”

The text agreed late on Monday sets out the EU’s negotiating mandate for the UN climate summit to be hosted in Baku, Azerbaijan, next month and is intended to establish the EU as one of the most ambitious negotiating parties.

Officials involved in the discussions said the nuclear debate had distracted from wider questions about the EU’s own energy mix and its contributions to international climate finance.

Linda Kachler, executive director of the Brussels-based think-tank Strategic Perspectives, said it was an “ideological debate on who is in favour of what technology instead of the debate on how fast the EU can get rid of fossil fuels, especially from Russia”.

A European official involved in the negotiations said nuclear positions had become “religious” and that the “elephant in the room” was the lack of discussion over how much the EU would contribute in funding to poorer countries most affected by climate change.

A key focus of the summit — dubbed by its organisers as the “finance COP” — is a new target for providing climate finance for the most vulnerable countries.

Under the 2015 Paris climate agreement, almost 200 countries must agree a new figure for climate finance by next year, meaning that COP29 is the last chance to settle on a goal.

Positions on the shape and quantum of a potential target are still far apart, with developing countries calling for an amount in the region of $1tn-$1.3tn.

Developed countries such as those in the EU, which is the biggest donor of climate finance, have been cautious about committing more public funds without accompanying structures to increase private funding.

They have also pushed for the base of donor countries to be broadened to nations such as China, Singapore and Saudi Arabia, which are considered under UN criteria set in 1992 as “developing” countries but are now industrially and financially powerful.

Eamon Ryan, Ireland’s climate minister, said he expected Baku to be the “most difficult [COP] negotiation since Paris . . . because it is about the money.”

Several EU ministers including Ryan and French climate minister Agnès Pannier-Runacher said there needed to be more focus on creating structures such as a capital markets union in Africa that would help raise money for renewable energy projects.

The EU’s climate commissioner Wopke Hoekstra said he had held “frequent fruitful discussions . . . on how to address financing” at a preliminary meeting in Baku last week.

“The way we will approach this negotiation in terms of financing is threefold,” he said. “Making sure there is more money available, and that holds good for both the public and private. Secondly making sure we don’t spread ourselves too thin but it lands with those most in need, and third lets make sure that everyone with the ability to pay actually rises to the occasion.”

Kai Mykkänen, Finland’s climate minister, said: “We can’t be in a situation forever where countries like Singapore . . . are still treated as developing countries even if their GDP per capita might be higher than that of many EU countries.”

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Wage growth in the UK has slowed significantly, with pay excluding bonuses rising by just 4.9% between June and August compared to a year ago.

This marks the slowest rate of wage growth in over two years – only 3.8% when bonuses are factored in.

Adjusted for inflation, wages rose by 1.9% excluding bonuses and 0.9% including them.

These figures, released today (15 October) by the Office for National Statistics (ONS), have fuelled expectations that the Bank of England may cut interest rates in November.

Despite wages continuing to rise faster than inflation, analysts believe this is unlikely to delay a rate cut, potentially to 4.75% from the current 5%.

The figures also showed that the UK’s unemployment rate dropped to 4%, while the employment rate rose to 75%.

The number of people considered economically inactive fell to 21.8%.

However, the ONS has urged caution with its unemployment data due to issues with its survey, though alternative measures suggest the number of employees on payrolls has stabilised.

Meanwhile, employers are facing higher costs and are hesitant to make significant changes ahead of Chancellor Rachel Reeves’ Budget on 30 October.

Chancellor Reeves ‘wrapping herself in a straight jacket’ ahead of Budget

Commenting on the figures, Susannah Streeter, head of money and markets, Hargreaves Lansdown, said:

“Worrisome wage growth is in retreat, lifting expectations that borrowing costs will soon fall further. The rate of increase in average earnings (including bonuses) has fallen to 3.8%, a hugely significant drop given how pay growth had raced away in recent years.

“Although there had been forecasts for an even steeper fall, and wages are still beating inflation, this will still assuage concerns among policymakers about the risk that consumer price rises will pop back up into troublesome territory. “

Lindsay James, investment strategist at Quilter Investors, added: “With only a few weeks until the next Bank of England interest-rate announcement, today’s figures, along with last week’s GDP data and tomorrow’s inflation number, will play a vital role in the monetary policy committee’s decision-making.

“Labour’s first budget will also take place before the Bank’s MPC meeting, so the Bank will closely monitor market reactions and potential economic impacts.

“Though we could see another rate cut at the next meeting, it is seeming increasingly likely that the Bank of England will continue on its ‘slow and steady’ path with a 0.25% cut at most.”

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UK wage growth fell to 4.9 per cent in the three months to August, while growth in payroll employment flattened, official data showed on Tuesday.

Annual earnings growth, excluding bonuses, was in line with analysts’ expectations, and compared with 5.1 per cent in the three months to July, the Office for National Statistics said.

Including bonuses, wage growth was lower at 3.8 per cent, but this figure was skewed by large one-off bonuses to public sector workers last year.

The ONS said tax records showed that payroll employment fell slightly, by 35,000 or 0.1 per cent, in August while provisional figures for September suggested employment was virtually unchanged.

The data adds to evidence that pay pressures in the economy are easing. It also corroborates recent business surveys suggesting many employers have put hiring on hold ahead of this month’s Budget as they await more certainty over government policy on tax and spending.

“Should these labour market trends continue, Britain’s brief era of healthy pay growth could soon end,” said Charlie McCurdy, economist at the Resolution Foundation think-tank.

Wages are still rising faster than inflation, with real terms growth of 1.9 per cent in the three months to August excluding bonuses, and 0.9 per cent including one-off payments.

But Ben Harrison, director of the Work Foundation at Lancaster University, noted that even at the end of “a record 25-month run” of pay growth above 5 per cent, high inflation had left workers only £14 a week better off on average in real terms than two years ago, and £20 better off than in 2008.

The ONS also pointed to an ongoing decline in vacancies, which fell over the past quarter in all industries, leaving the total number of open posts at 841,000 — just above the pre-pandemic level.

Analysts said the figures supported the case for the Bank of England to continue cutting interest rates in November, following its decision in August to reduce the benchmark rate to 5 per cent.

Ashley Webb, at the consultancy Capital Economics, said the data showed private sector pay growth slowing in line with the BoE’s own forecasts, leaving a November rate cut “looking even more likely”.

Policymakers on the Monetary Policy Committee want to see clear evidence that the pay pressures that have been driving service price inflation are easing before they cut interest rates again.

Huw Pill, the BoE’s chief economist, said earlier this month there was “ample reason” for caution to avoid cutting borrowing costs too far or too fast.

Tracking the true state of the UK labour market has been especially difficult for rate-setters because ongoing problems with the ONS’s labour force survey mean its key estimates of employment, unemployment and economic inactivity are unreliable.

Wage figures are based on a different survey, and policymakers have been able to use administrative data — including the payroll records — and non-official surveys to help form a picture of hiring and employment.

The official LFS-based estimates for the three months to August suggest more strength than other sources, showing unemployment falling from 4.1 per cent to 4 per cent in the latest month, with employment strengthening.

However, the ONS said these numbers were at odds with the other sources and should be viewed with caution.

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Dutch asset manager Robeco will today launch its first exchange traded funds, joining a phalanx of traditional active managers that have embraced the fast-growing fund format.

While most ETFs have traditionally been passive index-tracking funds, actively managed ETFs have taken off in recent years and now account for about $1bn of the industry’s $14bn of assets under management, according to ETFGI, a consultancy.

They have proved lucrative for asset managers, particularly in the US, where they have seized 72 per cent of the net new fee revenue emanating from inflows into ETFs so far this year, according to Morningstar data, even as actively managed mutual funds have continued to haemorrhage money.

The active ETF market is less well developed in Europe, accounting for about 2 per cent of the continent’s $2.2tn in ETF assets. However, activity is hotting up with both Cathie Wood’s Ark Invest and BNP Paribas Asset Management launching their first active ETFs in Europe earlier this year, while BlackRock’s iShares debuted its first active equity ETFs. Jupiter Asset Management and Eurizon Capital are among those poised to follow suit.

The quartet of active ETFs from Rotterdam-based Robeco, a subsidiary of Japanese financial conglomerate Orix Corporation, are its first ETFs of any kind.

All four tap into Robeco’s existing specialities in its mutual fund business. The Dutch group earned a reputation as an early adopter of “sustainable” investment long before it became a fashionable bandwagon to jump on.

As a result, all but €3bn of its €196bn of assets under management were managed according to environmental, social and governance principles at the end of June. It also has two decades of experience with “enhanced” indexing strategies with systematic quantitative investing, which accounts for €76bn of its assets.

Its 3D Global Equity, US Equity and European Equity Ucits ETFs will tap into both of these strands in an attempt to balance risk, return and sustainability.

The fourth fund, the Robeco Dynamic Theme Machine Ucits ETF “showcases the company’s next-generation quantitative capabilities, utilising advanced natural language processing techniques to identify emerging investment themes early”, it says.

All four ETFs will be listed in Frankfurt, with additional listings, including on the London stock exchange, anticipated in “the coming months”. The 3D funds will have fees of 0.2-0.25 per cent, with the Dynamic Theme ETF priced at 0.55 per cent.

“Robeco has a long heritage of active management and is recognised as a leader in sustainable investing,” said Nick King, head of ETFs.

One further 3D ETF, an Emerging Markets Equity product, is scheduled to launch in the first quarter of 2025, with fixed-income ETFs also due next year.

Robeco’s mutual fund range has suffered from outflows of late, with a net €7.7bn heading out of the door in 2023 and €881mn in the first eight months of this year, according to data from Morningstar Direct.

However, Robeco denied its push into ETFs was a reaction to this. “The launch of the active ETF range is an integral part of our corporate strategy [for] 2021-2025,” it said.

“We see active ETFs as an additional vehicle to monetise our intellectual property in sustainable investing, quant, credits and thematic investing.”

Peter Sleep, investment director of wealth manager Callanish Capital, welcomed the launches.

“In my opinion, Robeco is one of the highest-quality, classiest outfits in Europe,” he said. “They were thought leaders in ESG before everyone else jumped on the bandwagon and have a team of research professionals comparable to AQR and Dimensional”, two well-regarded US quant houses.

Of the 20-25bp fees for the 3D ETFs, Sleep said: “That strikes me as very reasonable, and consistent with what we have seen from other big low-tracking-error active funds from JPMorgan, Fidelity and Franklin Templeton.”

THE Labour government will deliver its first budget on Wednesday, October 30.

Prime Minister, Keir Starmer has already warned that the Autumn Statement will be “painful”, leading to widespread speculation around what changes lie ahead.

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Experts say that pensions might be a key target for Rachel Reeves at the speech – which is being called a Budget, as it is the party’s first fiscal speech since the election – particularly since the Chancellor spoke about a £22billion black hole in the UK’s finances.

Already, pensions companies are seeing people withdraw money from pensions, amidst concerns that the government will change the goalposts.

However, financial commentators are warning people not to make rash decisions now, as it could significantly impact your financial future.

Michael Summersgill, chief executive at finance firm AJ Bell, said: “Constant rumour and speculation about the future of retirement tax incentives are hugely damaging.

“People are taking financial decisions in part based on pre-Budget speculation and it chips away at people’s confidence in pensions generally.

“Almost 100% of advisers we surveyed said they’ve dealt with tax and pension queries from clients concerned about the Budget, with a third saying they had seen an increase in clients wanting to take tax-free cash in anticipation of a pensions tax raid in the Budget.”

Shane Julian, managing director and financial planner at Brancaster House Financial Planning added: “Our advice to consumers ahead of the Autumn Budget is to not get caught up in speculation… It’s important to stay calm and avoid knee-jerk reactions to potential changes in pension policies.”

That said, people should be keeping a close eye on the budget, to understand what’s been announced and how it could impact your finances.

Some of the changes that are expected could change your retirement plans, so it’s important to reassess once we know what’s been announced.

To help you understand what to keep an eye out for, The Sun has spoken to several experts in the pensions industry and asked for their key predictions for what pensions changes might be on the chancellor’s hit list.

State pension increases

Not strictly a Budget announcement, but the government is expected to confirm how much the state pension will rise by from next April.

The Labour government has committed to the triple-lock, which says that state pensions will rise by the higher of earnings rises, inflation, or 2.5%.

Last month’s earnings figures showed average growth of 4%, so this is the increase that is most widely expected.

The final decision is typically made by the Work and Pension Secretary, usually around the time of the budget.

Some commentators have also said that the chancellor might reconfirm Labour’s commitment to the triple-lock in the Budget.

One important thing to look at out for is income tax band freezes. Currently, people who only receive the state pension do not pay any income tax because it falls under the 20% tax threshold.

However, thresholds are currently expected to stay frozen until 2028.

Even if the state pension only rises by the minimum possible of 2.5% under the triple-lock, this will push some of the poorest pensioners into paying income tax before the freeze lifts.

Changes to the state pension age

The current state pension age is 66, but there are already plans in place to increase this to 67 in the years 2026-28 and then 68 from 2044-46.

The second increase impacts anyone who was born after 1977.

There is another review of the state pension age planned for this parliament, which will make recommendations about whether the SPA should change, and if so when this will happen.

The response isn’t expected until next year, so we’re unlikely to hear anything about it in this Autumn Statement, although it could be mentioned.

Cuts to tax-free pensions cash

One of the most commonly predicted changes for this year’s budget is the rules around tax-free cash.

Under the current system, retirees can access 25% of their pensions saving tax-free, up to a limit of £268,275.

However, there are rumours that the government might reduce the percentage that can be taken tax-free or reduce the cap on the maximum amount.

Calum Cooper, head of pensions policy innovation at Hymans Robertson, cautions that any changes could directly affect people’s broader financial plans. For example, people planning on using the tax-free cash to pay off their mortgages might not be able to do so.

Generally, experts are concerned about the impact that changes to the rules would have on pension saving.

For instance, Brancaster House’s Mr Julian said: “Taking away these incentives could discourage saving and ultimately increase pressure on the State’s welfare system in the future.” 

He adds that the IMF has proposed a flat amount of £100,000 rather than a change to the overall percentage.

He said: “This could be an ‘easier’ option for Labour, but I would hope if such a change is implemented, this would be on an age basis.”

Broadstone’s head of policy, David Brooks, says that estimations show that changing the limit to £100,000 would impact one in five retirees and raise around £2bn a year in the long run. 

Clare Moffat, pensions expert at Royal London urges people not to panic, and says that typically these changes are introduced slowly. She adds that it’s important that people seek advice or guidance before removing any money from their pensions.

She said: “In the past, changes to rules have not been brought in overnight, giving people notice of the change and giving those who were entitled to a higher amount the opportunity to access that higher amount when they want to. 

“Taking money out of a tax efficient environment isn’t something to be done on a whim. And if you have a large amount in a pension, taking out all of your tax-free cash means that it could be sitting in your bank account.

” If the worst were to happen and you died, that could mean that inheritance tax would be payable. Currently if money is in your pension pot and you died then it wouldn’t normally be subject to inheritance tax.”

Mr Summersgill added: “Even the perception that government might renege on the terms of the deal risks people taking actions which may not be in their best interest.

“Rumours about the future of tax-free cash, one of the best understood and most valued benefits of pensions, are particularly problematic.

“Taking your tax-free cash is an irreversible decision and, assuming the chancellor doesn’t pursue a disastrous raid on tax-free cash, those people may find they’re in a worse financial position long-term.”

Reducing the annual allowance or reintroducing a lifetime allowance 

Independent financial adviser company Edale says we could see changes to the annual allowance.

This is the maximum amount of tax-relieved contributions that can be made to a pension each year and currently sits at £60,000.

It says that the government could reduce the annual allowance further, perhaps back to £40,000 or lower. 

Another target could be the carry-forward rule, which allows individuals to use any unused annual allowance from the previous three tax years, provided they were members of a pension scheme at the time.

Edale said: “The government could reduce the number of years from which unused allowances can be carried forward (e.g., reducing it from three years to one year). Alternatively, they could cap the total amount that can be carried forward.”

Labour could also look to reintroduce the Lifetime Allowance (LTA) which is the maximum amount you can accumulate in your pension pots without incurring extra tax charges. 

It had previously pledged to do this, then said it would create an exemption for some public sector workers.

This promise was then reversed, before Labour quietly removed the pledge to reintroduce the LTA from its election manifesto.

But experts have warned that this doesn’t mean it won’t be reintroduced at a later date.

Introducing flat-rate tax relief

One rumour that does the rounds every time the budget happens is changes to the way that pensions tax relief works.

Under the current system, the tax relief you get on your pension contributions is determined by your marginal rate of income tax. Basic rate taxpayers (and those who earn under the tax threshold) get 20%, higher rate tax payers get 40% and additional rate taxpayers get 45% .

But moving to a flat-rate pension tax relief system, often predicted to be around 30%, reduces the relief available to higher earners, lowering the overall cost to the government.

Mr Brooks said: “This is the main rumour doing the rounds and would have the biggest impact on people saving for a pension but is likely to be the hardest. 

“This would likely be bad news for some higher rate tax payers but better for basic rate tax payers who would see a greater benefit in pension savings.

“It would also have challenges around salary sacrifice and net pay arrangements and could be very tricky to implement in Defined Benefit schemes so would have potentially major ramifications for public sector workers.”

Rules around inheritance tax and pensions

Another hotly tipped change is around the way that pensions and inheritance tax interact.

Under the current rules, money held in a defined contribution pension does not form part of your estate and can be passed on inheritance tax free. If you die before age 75, the money might also be income tax free. 

However, this could all be about to change.

Tom McPhail, director of public affairs at the Lang Cat said: “Top of my list of expected changes is the introduction of some form of death tax on unused DC pots (probably with an interspousal exemption). 

“It would nudge savers back towards choosing more guaranteed incomes, so reversing some of the effects of the 2015 pension freedoms.

“It would also close off an anomaly whereby tax relief funded savings are allowed to grow tax free and then pass on to the next generation without paying any inheritance tax.”

Mr Brooks added: “Changing one or both of these rules would be a relatively easy move and potentially lucrative. This could risk devaluing the benefit of pensions as a savings method and from a technical point of view, there could be complications around trust laws.

Brancaster House Financial Planning’s Julian agrees that as pensions are usually held in Trusts, this would require significant legal changes. He said: “It’s not something that would happen overnight, but it’s an area worth watching as it could have big implications for pension savers.”

Changes to national insurance and pensions

Under the current rules employer contributions to pensions are exempt from National Insurance Contributions (NICs) and are tax-deductible. 

However, Edale says that one potential option is that the government could introduce NICs on employer contributions or limit the tax deductibility of these contributions.

Ultimately, this could reduce the cost of pension tax relief to the government. In fact, IFS calculations show that applying employer NI to employer contributions to a pension would raise huge amounts – £17bn a year – for the Treasury.

However, Fidelity warns this could also reduce the amounts being saved into pensions by at least the same amount if employers pass on the cost to their workers.

The Lang Cat’s Mr McPhail said: “I think it likely the Chancellor will reduce or withdraw the NI relief currently granted on employer pension contributions. 

“This has the superficial appeal of being low hanging fruit; it can generate lots of money for the Chancellor to spend and it won’t have any immediate effect on people’s household finances. 

“However, in the long term, like Gordon Brown’s ACT raid in 1997, it would undoubtedly reduce the amount of money going into people’s pensions and so would lead to poorer retirements for millions.”