The money is rolling in and pots are swelling fast
People’s Pension (run by People’s Partnership) has hit £40bn and is on the same trajectory as Nest.
You may have noticed that between them, Nest and People’s Pension have £100bn of our savings.
There is a great opportunity for these organisations to invest their 20 million pots for growth. Nest has said that it will be introducing within the next 18 months a default for its users that will take them through to 85 (when they’ll find themselves in an annuity – insured by Rothsay).
Five years ago it was boasting that its money was invested around the world and pointing out to those who’d watch (only 147 watches ) that 4.4% of its money managed was invested in the UK. Back then the message was different than today.
Like at People’s Pension’s, the Nest investment team is becoming more important. So is investment in the UK. This year, Mark Fawcett told us (I’m one) 13m Nest savers that our money was being directed more to the UK
I am bored by politicians and commentators arguing about mandation, the fact is that DC pensions are investing more in UK growth and I hope that all pensions will do the same, that includes DB schemes that choose to carry on and CDC schemes which are just starting out.
More than a fifth of that £60m invested by Nest is now invested in UK, that’s five times more as a slice of the cake than five years ago.
It is not just that we feel a little queasy about United States economic policy (hmm), it’s that we want our money to work for the UK. The UK stock market is outperforming America’s and we no longer have a currency that cannot keep up with the mighty dollar. These are incidental but do at least make us feel easier about investing in the growth of Britain.
I don’t want to sound jingoistic , I am not right wing in my political views but I do think that the big funded pensions at LGPS and USS can now be joined by Nest and People’s and not far behind them are other master trusts over £25bn (Lifesight and L&G).
If you look at my blogs promoted below, you’ll see I’ve been calling on Nest to make our money work harder for fourteen years. At last I think I can bring good news.
There is a huge weight of money in GPPs and legacy personal pensions (some still in with profits) that needs to consolidate to pension funds that work as hard as the big master trusts.
Default funds should not and will not (if TPR and FCA get their way) be backwaters where people’s money sit ignored. Consolidation should mean that every pound in pensions is treated as important, particularly money on which members have taken no decision. That is the task of CDC where all money goes into a single fund.
Soon we will see our workplace pensions alongside our state pensions and DB pensions yet to come. CDC schemes will join too (starting with Royal Mail’s)
Over time I expect to see the big master trusts, DB plans and CDC plans looking to savers as variants on one thing – their pension.
Footnote on CDC
To finish I will print an announcement from Royal Mail’s Collective Plan (CDC) which will be fantastic news to the posties who are members of it
I look forward to the day that we all think of our workplace pensions in terms of the benefits we get – like this.
If you look at my blogs promoted below, you’ll see I’ve been calling on Nest to make our money work harder for fourteen years. At last I think I can bring good news.
