One of the hazards with living in the City of London

Everyone it seems wants Jeremy Hunt to sort their problems with a pension fix

If I was Jeremy Hunt I would be blocking ‘pensions’ from my browser right now. All week the financial press, led by the Mail have been running spoilers about him raising the various pension allowances (LTA, MPAA, AA) to get us (well mainly elderly doctors) back to work. However we feel about the tax-disadvantages of the AA-Taper, concessions to ‘savers’ will be characterized as tax-loopholes for the Tory faithful, Jeremy Hunt may win a battle but lose the war. The current pension watchwords are ‘adequacy, fairness and predictability’ and however woolly, don’t really extend to protecting pension millionaires from 55% marginal tax-rates.

But as he gets it in the neck from the BMA and the IFA, he is also being assailed by City grandees. The FT reports that

In a letter seen by the Financial Times, the UK Capital Markets Industry Taskforce (CMIT) told the chancellor there was a “substantial opportunity to deploy more long-term UK pension capital into the growth drivers of the UK economy, delivering better returns for savers and faster growth for the country”.

The letter’s signed by Andy Briggs, CEO of Phoenix and Peter Harrington, the equivalent at Schroders.

The Chair of Phoenix is currently taking a sabbatical to be Lord Mayor of London and Nicholas Lyons has separately been lobbying to get more money channeled into the UK economy from pensions.

In a double scoop, the FT reports that

Nicholas Lyons, the City’s Lord Mayor, told the Financial Times last month that he had held talks with the Treasury about forcing pension funds to invest in a proposed £50bn growth fund.

“I would like mandatorily to have 5 per cent of [every single DC pension] put into that future growth fund,”

… estimating that there was a pensions pool of about £2tn to draw on.

Watch out , there’s a fat cat about

 A perennial hazard at seven dials

This is all very close to home for me. Phoenix is next door to my local Marks and Spencer’s (sadly closing down this month) while Schroders is opposite my old WeWork office (I used to peep into its gym). I can literally bump into these people doing my shopping and going to work and yet we’ve never stopped to have a chat about it being my money and my pension – they’re after!

A 5% levy on my pension pot would mean £100bn being disinvested from our pots and reinvested as the Mayor would like. The FT was also told that he had held talks with the Treasury about forcing pension funds to invest in a proposed £50bn growth fund (make that £100bn while you are about it Jeremy).

So I’ve written to Sir Nicholas suggesting we have a meeting in the Mansion House or a coffee in Cheapside. A reasonable proportion of the £2 trillion in the Mayor’s line of site is under the management of Standard Life and other Phoenix companies and while I’m not a policyholder, I have got my pot with L&G whose offices are round the corner. Nigel Wilson, the L&G boss is also quoted by the FT , warning  this week that the long-term decline in equity investment by the pensions sector was a significant factor in companies’ “perpetual drift” away from London.

Nigel Wilson also backed compelling DC schemes to invest in infrastructure and growth equity because otherwise, “it will take too long to change the whole culture in the UK”.

From Phoenix’s to L&G’s offices is a ten minute walk. if you go one way you walk past the FT and the other you walk past the London Stock Exchange. Walk a couple of hundred yards out of your way and you are at the Lord Mayor’s place and the same distance south and you are at mine.

Hold your bets

With so much budget punditry and with the streets alive with  fat cats after my pension, I will be staying indoors on Wednesday 15th March.

Jeremy Hunt will be standing up in the House of Commons to deliver his first budget, as the starter’s tapes go up on the Ballymore Novives Hurdle at Cheltenham.

I am not making any bets on the budget but I do fancy Hermes Allen in the Ballymore.

Hermes Allen is around 4-1 for the Ballymore.