South West Trains near the south coast
The month is moving on and so must I. Today I will leave my rehabilitation in Shaftesbury – Dorset. Outside my mother’s house there is snow and I anticipate problems that probably won’t happen. I see similar problems at work.
If you turn back for fear of problems with snow from South West Trains then you have no confidence in our rail system. It’s a bit like the attitude many of us are taking towards this Government. Here is the latest issue we are hearing about the Treasury’s issues. The Government is facing higher borrowing rates. The FT tell us
…higher interest costs are putting her goal in peril. Yields on longer-dated gilts have been rising steadily in recent weeks, with the 10-year gilt yield climbing as high as 4.82 per cent on Wednesday, the highest since 2008.
This higher cost of borrowing is partially caused by fund managers who fear “stagflation” in the UK economy. It’s a bit like me facing a day sitting on a train because of factors outside my control. We are worrying about the impact of Trump and that leads to us selling bonds and pushing up the Government’s interest costs.
Chancellor Reeves can either cut her spending or raise her taxes. She has promise to only review raise taxes once a year, so economists predict a summer of reversals on growth model.
While all this speculation about bad news for the economy in the short term is being speculated on (it’s a long FT article), Emma Reynolds (one foot in DWP, one in the Treasury) is heads down and writing a Pension Bill which I am told will be done in January.
One of the glories of my neurological trauma in November is that I am light on details for inclusion in this Bill. It’s a bit like taking a train for London and ending up in Reading, I really am not ready to think about this upcoming Bill.
But let’s hope that it is not dressed up to meet the needs of a cash-strapped Government. Rather I would have have pensions considered long term liabilities and that liabilities are matched (where funding is needed) with funds that have a long term delivery aim.
Yesterday I had the great opportunity to speak at length to Gregg McClymont , a former Labour shadow pension minister and now a worker for the union backed IFG. IFC puts assets in the way of pension schemes who take a view that they need to achieve long term growth rather than de-risking to meet the short term views of the “Low Dependency” brigade, for whom “growth” is an anathema.
I intend to meet over the next few days with the inspirational people who make my job worth doing. I hope in February to meet Gregg’s former and Emma’s current adviser. This is the wonderful Andy Tarrant who I take inspiration from when promoting pensions over wealth. I speak regularly with Andy Young, a man who refuses to lose energy despite his advanced age. Andy Young and Andy Tarrant provide me with hope that Emma Reynolds is building around her, people who think about the long-term state of the nation (not just the value of pensions to the pension industry.
I had hoped to publish today Con Keating ‘s brilliant session with the Pension PlayPen members delivered yesterday. Later I will provide readers of this blog with a video of the event and some brilliant questions from good people as various as Tom McPhail of the Laing Cat and John Hamilton of Stagecoach.
I would like to point out to readers and to those in Government writing this Bill, that the best minds don’t always live in London. The spread of those mentioned above stretches from Brighton to Perth (Shetland if you count Keating as a farmer).
The reason I am writing this is to counter the impact of the woeful FT article on my spirits. It is also to give me that I am returning to the smoke to get better engaged with my work – turning DC pots into DB pensions. If anyone wants to find out more about this, please drop your details to me. If you don’t have my details , please drop yours to henry@agewage.com (no nonsense please – neuro limitations make me quick to ignore – with a pained smile on my face. We are on serious business.
Pensions are a long game and the advice on how to handle volatility is really very simple. Your will find an early reference to the model from a guy called Joseph in Genesis 41:28–32.
Practical examples are to be found in the way copper prices were handled in Chile or how Norway stored its hydrocarbon revenues charging three times the tax per barrel than the U.K. did on very similar total volumes of oil extracted.
The U.K. will have an uphill fight starting in “famine” (Stagflation maybe) and the Debt Management office face a 20% increase in borrowing costs. It has not stopped the FTSE CEO wage grab who have now been paid more for 2025 than the average wage of their workers.
Who would take the abuse that the new government is facing from shortsighted people.