The biggest losers of a market crash aren’t in the market.

Running around the Barbican last night I was listening to a Crowdcast on how you value shares and trying to work out how a whole stock market can be down 4% in a day. The weather was clement, there was little to differentiate the day from any other May day – little sign of the receding pandemic – little signs of stockbrokers jumping out of the windows of the nearby London Stock Exchange. Infact the City looked a lovely place last night.


Was this a technical adjustment- the economic theory I was listening to suggested that the world was waking up to some bad news that had previously been hidden. True we’d had some very high inflation numbers in the UK but it was the S&P 500 which was down by 4%. The FT reported

“There’s a beginning of a deterioration in the [economic] growth story,” said Michael Metcalfe, head of macro strategy at State Street Global Markets. “And it’s started to get picked up in [corporate] earnings.”

So what does this mean to the pension saver? Well if you are at the back end of a lifestyle program you are in bonds right now- so that’s ok- yeah! Wrong- Market Watch comments on the “bond market wreckage”

How bad has 2022 been? The investment-grade corporate bond market’s total return was negative-12.3% on the year through April 29, compared with minus-8% for high-yield, negative-12.1% for convertibles and negative-12.9%

Unless you are in bonds as a hedge against annuity prices (the ostensible reason for de-risking into bonds) you should be wishing that you hadn’t been de-risking at all.

The truth is that a lot of us are going to have to re-imagine how wealthy we are. This is necessary pain – it is what we signed up to when we decided we could manage our pensions ourselves.

Better off not in the market?

Your best bet three months ago was to be in cash. Some might think that those relying on “cash ” are the winners. But cash is not much of a bet if you are planning on drawing down your pension over time, not a store of value for paying tomorrow’s bills – now increasing at 11% pa for lower income households.

As I came off the Barbican podium, I walked back through some City backstreets, I passed several homeless people on my way home and wondered what they’d make of the phrase “nowhere to hide”.

The poorest people are the people who aren’t even getting the minimum benefits on offer. These are the households missing out on a full state pension , on pension credits, in the case of the over eighties who have no state pension- the Citizen’ Pension.

I spent some of the time before my run with Steve Webb, discussing how you influence people who do not speak English, do not use the web and know nothing about UK benefits that they do not have to live on thin air!

But when they buy the bare essentials to live on, when they pay rent or feed the meter, they are finding that they are having to find more money – lot’s more money. That’s why we need to focus our brilliant economic minds not just on the values of the shares we own, but on the value of the society we live in.

That is why Rishi Sunak must do more than reflate the economy by giving tax breaks to businesses. He must focus on making sure that benefits get to the people who need them and in sufficient quantities that people can heat and eat.

Because I think the cost of living crisis is an acute societal problem that must be prioritised, as we prioritised saving the NHS during the worst of the pandemic.

In short – if we cannot sort the problems of unclaimed benefits and underpaid benefits in 2022, we never will. Let’s make some virtue from a pretty bad situation. Let’s think first of the most vulnerable and second of ourselves.

While not everyone will agree with Jack Munroe, I do.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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