I had hopes that the FT would get behind the Reeves/Reynolds pension agenda.
This 20 minute video, produced by the Financial Times in the middle of June called for bi-partisan support for a reform agenda that included boosting the London Stock Exchange as part of the “growth agenda”, with pensions at the heart of the reform.
Inside Britain’s market reboot: An @FT film on the push by ministers and the City to tackle London’s ailing stock market.
Interviewees include Jeremy Hunt and execs from Schroders, London Stock Exchange and UK start-ups.https://t.co/oQdNEP8DMb— Michael O’Dwyer (@_MODwyer) June 19, 2024
This is how the FT described its position then
“A declining stock market and restrictive pension system rules have made the UK a less attractive place for new businesses to find the funding they need. The FT looks at what is being done to improve the City’s competitiveness as an international capital market”
So I am disappointed by the FT’s Deputy Editor , Patrick Jenkins, has come up with a declinist piece that repeats the three tropes that the pensions industry most wants to get heard
- Pensions are being starved of new cash because the AE reforms are not being implemented (the DC equivalent of the DB deficit demands prior to 2022)
- A backlash against VFM as a means to reduce charges rather than focus on improving outcomes
- An attack on the “shrill voices of pension policy reform” to invest in the UK ‘s equity for patriotic reasons
As the FT’s Katie Martin says in the short film (above) , the UK has the only funded pension system in the world which is underweight its home market equity markets. Why should we direct people’s savings into low-performing assets and not into growth stocks?
The answer , to a great extent, is because our savings industry has focussed our minds on saving more and not saving better. “Financial education” is about piggy banks not investment. Nobody is speaking in schools about how entrepreneurs make their money and how the capital markets give them the leg up to scale up.
Instead we hear incessant arguments about past returns (UK under performance) the cost of investing in private markets and the need to continue piling more and more into bonds and cap-weighted global equity funds.
The quote in the title is from Jeff Prestridge. It is an inaccurate description of Rachel Reeves’ first month in Government which has seen the new Government press ahead with a new Pension Schemes Bill , a Pensions Review that will prioritise pension savers investing better not contributing more and guidelines from the Regulator to enable private markets to invest in pensions so pensions can run on and invest in the UK.
I suspect the quote will get some airing on social media, but it’s declinist rot – (and I am usually a fan of Jeff’s).
It is clear that the Government is not going to get a clear run at a revamp of investment. It is faced with a thirty year legacy of lockdown that started with Maxwell and is still prevalent. But if we are to take pensions out of the quiet graveyard, we need to stop sneering at our elected leaders and get behind the policies that they and their predecessors were elected on.
