Reeves, my pin-up

Oops , sorry about my plea for some morale support yesterday, I have slept properly and hope to agree a way forward today. I wondered for a brief moment whether I should pack it in!

I mention this because it is time for people sitting on top of the £1.6tr in capital to do something about being in Britain over the next 30 years ( I am being selfish- that’s how long I expect to live).

Before the financial crisis that started in 2008 and has continued ever since, this country enjoyed 2.5% growth and “things could only get better”. We thought it possible to have good railways, airports and  a great country in which to live. Then it all went wrong

Writing in the FT, Jim O’Neill said yesterday.

this is especially important — the UK’s problem going right back to the 2008 financial crisis, and before, has always been the supply side. Namely, our woeful productivity and our weak private and public investment. Since the crisis, feeble average growth of 1.5 per cent has been almost completely driven by very strong labour force growth. Productivity growth has remained extremely weak. If we are to have stronger growth while being less inflation-prone, we need more investment and more productivity — it really is that simple.

Or put in my kind of language, for the worse part of 20 years  we have considered down-sizing better than outlandish growth. We’ve decided to capture our bit and forget about the future. I worked this out in Mowbray listing to people who were fed up with that, Bob, Julian, John – I will not forget it.

There are some, (I think of the bearded one from Nottingham), speaking on the TV that we should lock down and capture what previous generations achieved without creating for the next.

In our £1.9tr world of pensions, that means thinking of lending money to companies via bonds rather than investing in them to build Britain into something that Europe isn’t but America is. Actually I know a few friends who emigrated from my year at Cambridge (Hi Matthew Le Merle, Hi Alison Davies), They don’t seem to be worrying about life much, they just get on with doing things that make them heroes in the USA but won’t here.

What O’Neill misses is the framework where good things like the Oxford to Cambridge development are capitalised and achieved. I’m not from up north but I can’t but believe that the same vision is happening in  Curzon St Birmingham, Leeds and Manchester and Newcastle and all that goes between.

We worry about investing in the UK, we like the idea of the returns we get from investing in the USA, especially when our pound is battered against the dollar and the Americans uncover a new technological miracle. I am happy because it is what has made my pension pot fat.

But as a 63 year old aspiring to die a 93 year old I do not want to buy bonds and short-term stuff and be guaranteed a boring life with an annuity. I love that 100% certainty that is a backstop but I want more than the insurance of parsimony. I want my 30 years of investment paid out on top of my certainty and that is why I will buy a pension when I can swap my pot for a retirement income that is mine and my kids to enjoy.

Please do not think I am thinking in retail terms and that I will spend the next 30 years worrying about their inheritance tax (thanks Mum I have no worry paying the bill you leave me for your lovely house, I have a pension to take care of the mortgage).

I don’t worry about pension income being inheritable, but if my son chooses to gift himself a share of the pension that I enjoyed, he will be able to, by swapping DC for DB when it comes his time. He may even buy it on the way is we can find a way for standalone DB to develop or CDC to take a stronger foot.

This is the framework of thinking that O’Neil wants, It is actually the best thing we have, No other country, not the USA, not Singapore, not Europe (even Netherlands) has the legacy of DB and the capacity to recreate a pension culture from the saving system we created out of the collapse of confidence in 2008.

You may think I am talking nonsense but people said some great things on the comments page. I’d like to write what Jnamdoc said on my heart so it was my mantra till I did (in 30 years). Here it is

Agreed with PensionOldie. I’ve never known a person with such drive and prolific output as you Henry. It’s quite frankly a miracle that you are back at ‘work’, and as a friend I’m worried about 10 hour days so early in your recovery! Mornings only !

Your input and drive has been fundamental to the progress our community (indeed “your community”) has made in trying to turn around this dis-investing dis-invested pension ecosystem, with the twin objectives of nurturing our economy and seeking to provide working people with a dignified living in retirement, and we all truly appreciate you, more than you will understand

There is some rubbish that he writes afterwords that calls on me to slow down (no chance) but I’ll take the compliment and give it back. I’ll give it back to all the people who want pensions to provide the economic framework for future growth. This includes the man I work with – Edi – who is chief among us in having vision, money (oops capital) and a big wine cellar (which I can’t drink).

I think I may send this blog to the WTW awards so I don’t win again!