White collar -“tax saving” ; blue collar – “retirement fun”

Posted on February 22, 2026 by henry tapper

For many people who think a lot about their personal finances, their pension is a convenient safe to hide money from HMRC. This statement is taken from work done by Claer Barrett of the FT on responses to a “how I use my bonus” survey , involving  readers and published here. High tax rates do indeed drive the behaviour of those working in and around the City.

This makes a lot of sense if you aim to maximise the efficiency of your investments using wrapper labelled “pensions” to avoid national insurance , income tax on contributions and taxes on investment gains made.

Pensions are particularly efficient at present because employer contributions to your pot or to buy pensions are not subject to national insurance. And the amount that is saved by companies in paying your pension contributions loses HMT/DWP almost exactly what they get back from us drawing down on our pots and getting pension income.

Damien’s key insight is that the average win for those in pensions is over £785 for each human being living in the UK. But this is of course anything but how tax gets saved. The kind of person who cares about tax relief, national insurance saving and like tax free returns on their investment are not thinking about pensions but about wealth.

As has been proved by the furore over inheritance tax, there are many for whom a pension pot is not to be touched but paid to the next generation on death, as a means of avoiding capital taxes – most importantly IHT which is pernicious to those sufficiently wealthy to need liquid funds to meet HMRC demands.

The idea that saving voluntarily into a pension plan for pension has all but been extinguished by the money purchase AVC which can often be exchanged for tax free cash and very rarely is exchanged for extra pension.

Tax is a driver for almost every voluntary pension payment. But there are many people who opt out of workplace pension and they are not doing so for tax reasons. They are the people who do not want or cannot afford to make pension contributions through payroll.

I am reminded of presentations I did with Harold Davenport in Rotherham miner’s clubs in the mid 1980 when people still thought of themselves as in miner communities. Harold would bring out in front of tables of men a large folder that was full of cut out pictures of ladies from gentlemen’s magazines.

When you retire, do you want some of this?

Harold would ask, pointing to a busty woman.

He would then open up the other side of the folder which would be stuffed with £1 and £5 notes .

If you want out of them , you’ll need plenty of these.

Harold would conclude, pointing out the bank notes. There would then come out applications to pay more into the  pension.

There are two ways of selling retirement , white collar and blue collar. We focus on white collar sales because that is where the money is, but the blue collar world is one of need and is generally ignored. I don’t suggest we go back to old-style techniques as perfected by Harold, but I suggest that we need to get to grips for the need of blue collar workers to have pensions paid to them so they can have decent lives and tax and national insurance don’t matter in discussions about pay now- pay then.

Forty years on from the Rotherham miner’s club

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The grift economy is going mainstream – at least in America.

Posted on February 21, 2026 by henry tapper

2025 was the year the grift economy went mainstream. Are we doomed to repeat it?

Feb 18, 2026
On January 7th, Chris Hayes taped an appearance on The Late Show at 5:30 p.m.

A few hours later, before the episode even aired, a friend texted him a screenshot. Someone had created a betting market on Kalshi, the prediction market platform, asking whether Hayes would mention Trump, China, or affordability during his appearance

The interview had already happened. It just hadn’t been broadcast yet.

All In with Chris Hayes on Instagram: “@chrislhayes reacts afte…

The market grew to almost $900,000.

This is the rip-off economy — or the grift economy — in its purest form: a world where everything — your attention, your data, your daily activities, even events that have already happened — is a surface to extract value from.

Where the line between investing and gambling has dissolved. Where the business model is built around exploiting customers.

The Economist published a piece last October called “The End of the Rip-Off Economy,” arguing that AI will actually fix all of this scamming and grifting. Their thesis is that technology empowers consumers, removes information asymmetries, and — their words — “the days of the know-nothing consumer are over.”

I want to take that argument seriously. Because it’s not entirely wrong. AI can potentially help consumers compare prices, detect scams, negotiate better deals.

But I think it misses something fundamental about what actually happened in 2025.

The gamblification of everything

Prediction markets hit nearly $40 billion in volume in 2025, a 400% increase from the previous year. And Kalshi’s CEO has been quite honest about his ultimate vision: “The long-term goal is to financialize everything.”

Screenshot 2026-02-21 at 15.31.23.pngEverything. And they’re not kidding.

You can now bet on how long the famine in Gaza will last. Whether your favorite influencer will get divorced. Whether the second coming of Jesus is happening this year. (Traders give it a 3% chance before 2027, if you’re curious.) A gaming attorney called it what it is: “gambling, no matter what they call it.”

The line between investing, gambling, and… whatever this is… has completely dissolved.

And if you watched the Super Bowl this month, you saw it in real time. Americans legally wagered an estimated $1.76 billion on the game. But for the first time, prediction market platforms and traditional sportsbooks were in direct competition for that handle — with prediction markets arguing their bets aren’t actually gambling and therefore shouldn’t be subject to gambling regulations. Kalshi is now legal in all 50 states.

And the language is deliberate. 31% of prediction market users report encountering “trading” or “investing” language in platform messaging. You’re not betting. You’re trading contracts on a federally regulated exchange.

And it’s not just prediction markets. Americans now spend more on scratch-off lottery tickets than on pizza, movies, concerts, and sports tickets combined. In Massachusetts, adults average $1,037 per year on scratch tickets alone. Options trading — a form of stock market gambling, IMO — hit record levels in 2025. More than half of S&P 500 options were zero-day-to-expiration trades — bets that expire the same day they’re placed.

Warren Buffett, not exactly a pearl-clutcher, warned in his annual letter: “The casino now resides in many homes and daily tempts the occupants.”

When the casino has no rules

 When you turn everything into a betting market, you also create new incentive structures for cheating. 2025 did not disappoint. When there’s no insider trading protection, no accountability, no way to know if the game is fair, people stop expecting fairness. They just try to get theirs before someone else does.

And that’s exactly what’s happening. In a single week in November 2025, the FBI met with the UFC about an allegedly rigged fight, and two Cleveland Guardians pitchers were federally indicted for a pitch-fixing scheme. Earlier in the year, 20 college basketball players were charged in a point-shaving scandal — the largest in NCAA history. An NBA coach and player were arrested on gambling-related charges.

And prediction markets? They have essentially no insider trading protections. None.

So when a worker at Google makes a million dollars betting on Google Search Trends (which they presumably had access to before the information went public), or a government insider makes $400K betting that Venezuelan president Maduro would be ousted hours before it happened, it’s all legal.

The people helping to build the casino are also the people in power. Donald Trump Jr. sits on Polymarket’s advisory board and is a “strategic adviser” to Kalshi. Truth Social is launching its own prediction market. And last week, the CFTC — the federal agency that oversees these platforms — announced it would drop its proposed rules to prohibit political and sports-related contracts. The new CFTC chair said the agency supports “lawful innovation in these markets.”

And as Kyla Scanlon wrote, major media outlets (including Dow Jones, CNN, CNBC) have announced partnerships integrating prediction market odds into their coverage. The news is now read alongside people betting on the news. When markets process political events before democratic institutions like Congress can even deliberate, market outcomes get treated as validation. As Scanlon put it: these bets “get laundered into legitimacy through the language of collective wisdom and truth machines, with a light touch of regulation.”

The Economist said information asymmetries would disappear. Instead, they inverted. Now the platforms know everything about us — our risk tolerance, our behavioral patterns, our dopamine responses — and we know almost nothing about who’s on the other side of the bet.

Also this advertising???

The price is watching you

 The gamblification of everything is one way the grift economy works. But you don’t have to place a single bet to get caught up in it.

Take surveillance pricing — the practice of using AI to determine a buyer’s “pain point” (the maximum they’ll pay before walking away) and adjusting prices accordingly. Not based on supply and demand. Based on you.

The technology to charge you a personalized price absolutely exists — the FTC confirmed that companies are selling these tools to retailers. Their staff report outlined four key concerns: privacy, discrimination, extraction, and algorithmic collusion.

And a Consumer Reports investigation with the Groundwork Collaborative found that 75% of products on Instacart showed different prices to different users — some paying up to 23% more for the exact same item. Instacart’s internal emails revealed a practice called “smart rounding” — using algorithms to squeeze extra cents out of every transaction. (New York’s Attorney General has since demanded answers.)

However, that doesn’t mean we’re in a surveillance wasteland, yet. The price swings people notice — and attribute to being tracked — are real, but they’re usually dynamic pricing: cheap seats selling out, fares changing based on overall demand. That affects everyone equally, not you specifically.

So is surveillance pricing a real threat or an internet paranoia?

Both. The capability exists and is being deployed in some contexts (grocery delivery, clearly). And the gap between capability and widespread deployment appears to be closing fast — Delta just announced it’s piloting AI-driven individualized pricing, and given how lucrative perfect price discrimination is, others will follow. Electronic shelf labels are spreading through grocery stores, making it possible to change prices by the hour.

The Economist said AI would empower consumers to compare prices. Instead, it empowered companies to charge each consumer the maximum they’d tolerate — and left the rest of us spending our evenings in incognito mode, trying to outsmart a system that has exponentially more data than we do.

The internet is mostly garbage now

“Slop” was named Word of the Year by both Merriam-Webster and the American Dialect Society. That feels right.

In case you’ve been blissfully offline: slop refers to AI-generated garbage flooding the internet. Content farms churning out hundreds of “articles” per day. YouTube channels posting AI-generated videos that earn millions. Fake reviews, fake news, fake everything.

AI-generated articles now make up over half of English-language web content. A study found that 20% of videos recommended to new YouTube users are AI slop. The top operators earn $4.25 million annually.

Even academic research isn’t safe. Nature reported that low-quality papers are flooding the cancer literature. Over 11,000 academic papers were retracted in 2025 alone — many of them generated by AI and rubber-stamped through peer review. On Amazon, 3% of front-page reviews are now AI-generated — 74% of them were five stars, and 93% had the “verified purchase” label.

Then there’s outright fraud. Deepfake fraud losses hit $1.1 billion in 2025 — triple the previous year. AI voice-cloning scams surged 148%. One in four adults has encountered an AI voice scam. It only takes three seconds of audio to create an 85% voice match. One woman lost $15,000 after scammers cloned her daughter’s voice and called claiming there’d been a car accident.

The internet — the thing we all depend on to navigate modern life — is filling up with garbage. And the garbage is getting better at looking real. The internet used to be a place where you could find information. Now it’s a place where you have to verify everything — and you can never quite be sure you’ve verified enough.

So about that Economist article …

So back to the argument — that AI is ending the rip-off economy by empowering consumers. That “the days of the know-nothing consumer are over”.

It assumes AI would be used for us. Instead, it’s being used on us — and increasingly, by us.

Because the grift economy isn’t just something that happens to people. It’s something we’ve started to participate in. Hustle culture turned “finding an edge” into a virtue. Influencers sell courses about selling courses and we call it entrepreneurship. We celebrate people who game the system — the crypto millionaires, the dropshippers, the kid who figured out how to arbitrage sneakers. “Get yours” stopped being a warning and became a business plan.

I wrote about this last year — the way we’ve culturally normalized grifting as a survival strategy. What’s changed since then is that the tools have gotten exponentially more powerful.

It’s one thing when a guy sells a $500 course about passive income. It’s another when AI can generate the course, the marketing, the fake testimonials, and the fake reviews — all for the cost of a monthly subscription. The same tools that let companies build surveillance pricing and flood the internet with slop are becoming available to everyone. AI-generated fake storefronts. Deepfake influencers. Automated scam campaigns that used to require a team and now require a laptop.

The grift is getting democratized. And when everyone has access to the tools of extraction, the arms race accelerates.

The grift economy isn’t just a series of bad actors making exploitative choices. It’s a byproduct of what happens when trust collapses — in institutions, in companies, in each other. When the game feels rigged, people stop playing by the rules.

What does it actually cost — financially and psychologically — to live in a society where nobody trusts anybody? More than you think. And you’re likely already paying it. That’s where I’m going next week

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Invest now to win CDC, DC and DB consolidation.

Posted on February 21, 2026 by henry tapper

Peter Roos is chief commercial officer at Lumera and his comments in Professional Pensions this week are pretty simple, you cannot avoid investment in administration software if you want to compete as a consolidator

“As we have seen first-hand through Lumera’s work in Sweden, scale improves outcomes only if these building blocks are developed and prioritised over a land grab on assets, supported by clean, reliable data and systems flexible enough to meet future regulatory and product demands”.

I have been thinking a lot about the administration needed to run a CDC scheme. When I was looking at what would be needed to run a CDC scheme I had a cautious outlook on the likely take up of CDC. I no longer think that way. That is because demand from CDC seems likely to outstrip the capacity of the original administrators we had expected to carry the load.

In my work preparing for submitting our proposal to the Pensions Regulator in August , it has become obvious that the investment in software to administrate a multi-employer CDC will be considerably bigger than we had envisaged.

We know at present that only TPT are going to offer a multi-employer CDC and they are already a consolidator of DC (Master trust) and will be a DB consolidator (if they can become a Superfund). It will be interesting to see how much they will need to develop their DC systems to include CDC in its suite of offerings.

I have had the good fortune to spend time in January and February with the old luminaries of Higham Dunnet Shaw and a leading consultancy in KGC, it is clear that administration has been under invested in for pensions. But what is becoming evident is that DC and CDC will have the responsibility of paying by default retirement incomes till the member’s death and if a partner’s pension is allowed – beyond.

Superfunds, as I know from my time working with Pension Superfund are subject to serious scrutiny from TPR and it is clear from reading the Pensions Bill and the draft of the CDC Code, that consolidation DC, CDC or DB superfunds is going to put a lot of pressure on providers to have the software and administration.

There are a number of new technology based software offerings available in the market. Lumera is one of them, other similar sounding software is from Festina, Aptia is a well funded administrator while services are available to the market through Mantel – part of the Spence empire.

2027 is likely to be a year of delivery not just for DB and superfunds, but DC as it offers default retirement income pathways to members. CDC offers a DB style pension to members with a DC contribution structure to employers.

As with the dashboard, innovation is not just comparable but learned from northern Europe.  Sweden and Denmark own two new pension software providers, one has a foot in Netherlands. It is not just in the Winter Olympics that these countries are strong. It is likely that in dashboards and pension administration, we will have to invest with them to catch up.

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Torsten Bell would make a good Chancellor one day

Posted on February 21, 2026 by henry tapper

I don’t spend much time on Twitter but I do follow Torsten Bell. Lately he’s been tweeting a lot about Swansea where he is an MP but occasionally he makes an economic statement that sounds like him and not the Treasury. Here’s one after the good news for the Treasury they’ve had this week.

It is Torsten Bell’s version of a Chancellor tweet

I  hope that this is the spirit that Bell brings to Edinburgh in a couple of weeks and that his message to the Pensions UK Conference is one of confidence in investing into UK this UK growth.

During this week I have seen complaints that the managers and engineers of our coal mines were getting the fruits of growth from a pension scheme 90% invested in equities.

I saw complaints that the Church of England would this April restore pension benefits when CoE scheme got into trouble  over property nearly 20 years ago. It too was criticised for being 70% invested in growth assets.

It’s been a week when I have had encouraging meetings with unions, employers, trustees and most of all with friends that I’ve been explaining CDC and how it can return us the pensions which we lost when DB closed and DC saving gave up on retirement income.

Of course I am pleased too to see the master trusts talking about flexing and then fixing people with annuities in later years. That is an alternative and better than pension freedom (pay lots of tax to have your pension pot swapped for a payment to HMRC to have a healthy bank account).

But back to Torsten

You have to go back a long way to find Torsten talk to the public about pensions. Here he is in the beginning of February. A lot of stuff (including some questionable stuff on housing) but nothing on pensions.

If I scroll back through our Pensions Minister’s tweets through 2025 there is nothing on social media about pensions.

I hope that this will change in two three weeks time when we are discussing pensions.

Torsten Bell would make a good Chancellor of the Exchequer one of these days, but right now he’s a pensions minister (a junior one at that). He’s got a Pension Schemes Bill  becoming an Act soon and he’s got a CDC scheme that needs a Code and authorisation of schemes.

I have had reasons to scold the Pensions Regulator this week for promoting itself in DB and DC but not mentioning CDC. I hope that our Pensions Minister will do a little better and promote the work that is being done and will see its fruit from 2027.

Right now the Pensions Minister sounds like he wants to be an MP and the Chancellor. He is the Pensions Minister – in case you’ve forgotten!

This blog is old enough to remember Torsten Bell when he was a campaigner for social justice

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A proposal for strong DB pensions that worry about fairness

Posted on February 21, 2026 by henry tapper

 

Let me use a weekend to plant a thought in the heads of those who influence their company’s and their company’s pension’s strategy. By company’s strategy I mean schemes that pay pensions not pots that people can drawdown or exchange for an insurance annuity.

Here are 11 questions for you as you enjoy your weekend!

  1. Do you think it is right, inter-generationally fair, that those who have retired and are soon to retire, do so with a pension while those who follow them have to rely on DC workplace pensions (whether they are yours or those run by others over which you have little influence)?
  2. Do you look at collective defined contribution (CDC) as an advantage to the average worker currently building a pot? Do you accept that it is likely to provide a better pension (up to 60% better says the Government)?
  3. Is your company pension in surplus? Does it have more than enough to meet the pensions it has promised to those who accrued into it till it closed?
  4. If there was a way that the company pension could be used to enable the generation of younger workers to get a pension like those currently or about to receive a pension from the company pension scheme, would that be fairer?
  5. If a business plan could show that by investing to set up a Mutual which could act as the proprietor of the CDC, the company pension would make money to pay its pensions, might this be a good investment?
  6. If it could be shown that the proprietor could pay the CDC scheme bills and return excess profits to employers as some dairies pay farmers against the milk they bring each year, might this not be an incentive to employers (including the pension scheme’s sponsor) to use the CDC scheme the Company Pension Scheme helped set?
  7. If the Mutual were to exert governance that reflected the values of the company pension by appointing the right trustees , administrators, investment managers and people to make sure the next generation knew what they were getting, would that be congruent to the values of the Company Pension?
  8. If the Mutual, by being owned by those companies and their pensions that invested to set it up, could pay dividends against the investment and by being tradeable , be sellable to like minded investors, would that be an investment that the trustees of the company pension could look at and invest?
  9. As a result of the Mutual being set up , a CDC could be created that did indeed offer a way to pay better pensions to any employer which wanted to take advantage of CDC over DC, would this have been worthwhile for the company pension trustees?
  10. Would, in this event, the arguments about intergenerational unfairness between a generation with pensions and a generation with pots be defused?
  11. Would arguments about the sensible distribution of the surplus of the company pension become less heated as there was recognition that the company pension , through this investment in a Mutual, was not sitting on lazy money (as it is being argued schemes like LGPS are doing) but putting that money to work for the pensioners protection when bad times return and for the betterment of retirement for the millions of savers who currently have pots but no pensions?

Here is my thinking and one answer (in bold). It may not be yours!

These arguments and many more spin around my head. It strikes me that good ideas are really simple and that there is a lot of complicated thinking in my head that I need to simplify as a thought to you , as someone who can influence the Company Pension or the company that sponsors that pension and workplace pensions to boot! Here is my proposal.

DB pensions with strong finances should consider investing in the proprietor of a CDC scheme which they consider likely to provide a  good investment and have values congruent with theirs.

 

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Is it worth having an intellectual education- or is work the best university

Posted on February 21, 2026 by henry tapper

I spent a good part of a morning last week in the FT, talking with journalists about pensions but also about the predicament the children of parents have, once they’ve graduated.

It doesn’t surprise me that the paper bemoans the financial plight of British grads today. Not only do they get less of a pay premium for a good degree but they have loans to repay if they find half way lucrative work. There is an incentive to fail and little incentive to succeed.

The atmosphere of Bracken House by St Pauls is far from that of the offices and bars and sandwich and coffee shops around it. It is a place of erudition where people discuss the kind of problems that middle class graduates have as they try to create and bring up families while seeing the value of intellectual investment being down valued. I mean that there is precious little of the intellectual brilliance that I see coming from the FT being reflected in conversations beyond its four walls!

Ironically, the only way that recent graduates can be measured objectively is by their salary premium, how much they earn more for giving up a minimum of work to get a degree

We have more graduates as a share of the workforce than any other country analysed but it pays our graduates less (and that’s before counting in the student loan and the loss of earnings that occurred when young people at college earn little more than pin money.

John Burn-Murdoch’s argument in this morning’s paper asks the question of this blog,

“is university still worth it?”

He concludes this is the wrong question and points to a lack of productivity in Britain as the start middle and ending of the graduate’s woes.

Like so many of contemporary Britain’s problems, the graduate squeeze is downstream of broader economic woes. Efforts to alleviate it would do better to focus on restoring growth than making tweaks to higher education intake and financing.

If Britain can haul its productivity growth and skilled job creation back into line with its peers, graduate earnings will be stronger, enabling student loan terms to be more generous and allowing more young people to pursue their passions confident of landing a good job.

I am not so sure. There is an intellectual curiosity in science and in arts that has led to Britain being the hotbed of the scientific revolution (along with California the London , Cambridge Oxford triangle is driving the West’s progression). Britain is the world leader in music, drama and our culture in general is admired – could any country in the world put on the proms or host Glastonbury or offer Shakespeare and other drama on the South Bank and in Stratford?

My concern is that we have down valued the intellectual brilliance of science and arts in this country to the point where we recognise nothing that cannot be put on a chart and measured in accountancy terms. We cannot just work harder to get richer, we must be smarter and learn to make our superiority in Science and the Arts (these intellectual hotspots) what Britain is about and rewarded for.

This is what I thought as I walked out of the FT last week and it’s a thought that’s still whizzing around my ageing brain. We simply do not value graduates for what they are. John Keats wrote a lifetime’s work in the year that he was 23. Some reckon he died broken by criticism not TB.

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Providing pension savers – with help on performance

Posted on February 20, 2026 by henry tapper

It is good to see some proper work being done on Value for Money

The Times article is here

Written by Times Senior Money Reporter Megan Harwood-Baynes

Where your pension is invested could mean the difference between retiring as a millionaire or being left with less than a penny, new analysis shows.

The personal finance site Investing Insiders looked at the performance of almost 13,000 pension funds, creating league tables to show the best and worst performing across different risk profiles (high, medium and low).

It found that taking a “select and forget” approach to funds may not just mean a slightly smaller pot — it could leave it empty.

Pensions are usually invested in a wide range of assets, including lots of different funds, plus less risky options such as cash. Investing Insiders looked at two scenarios where hypothetical investors invested all their money in one fund.

Person A saved £50,000 in the best-performing fund (Aviva Ninety One Global Gold Pension) in December 2020 and over the next five years got a 180.28 per cent return on their investment, increasing their pot to £140,140.

Person B saved their £50,000 in the worst-performing fund (Zurich JPM Emerging Europe Equity), which lost 98.59 per cent in five years, leaving £705 in their pot.

If that same trajectory continued over the next two decades, Person A would have a pension pot worth more than £3 million. Person B would be left with a fraction of a penny. These calculations include fund fees, but not investment platform charges.

Both funds are categorised as high risk, so would be offered to people with the same appetite for volatility.

Clare West from Investing Insiders said: “Sustained for 20 years, those kinds of returns are capable of producing either multi-million growth at one end of the spectrum, or near total wipeout at the other end.”

It’s an extreme scenario because most default pension schemes will invest in a wide range of funds and asset types, but it demonstrates the importance of diversification.

It also shows that you need to monitor where your money is invested in case something has gone badly wrong at one of your funds — as it did at many of the worst performers.

Zurich UK said its Emerging Europe Equity fund is self-selected by savers or through their financial adviser, and is not a default pension fund. It was suspended in February 2022 after sanctions were introduced following Russia’s invasion of Ukraine.

Zurich UK said: “The fund contains only the sanctioned assets and, as a result, shows very little value and low returns.”

Investing Insiders also looked at the returns on funds classed as medium-risk, where it had 20 years’ worth of data to analyse.

A saver who put £50,000 into the Zurich American Select fund in 2005 would have seen growth of 855 per cent, leaving them with a pot of £477,525. But the same amount placed in the Clerical Medical UK Equity fund would be worth £92,835, which returned 85.67 per cent during the same time.

West said:
“We know of people who have lost track of a pension pot, gone back to find it, and the past performance and the investment fees have eaten away, and there’s nothing left.”

Donato Boccardi, the head of investments at Aviva, said:

“By their very nature, default investment strategies are designed to do the heavy lifting for you, placing investment decisions in the hands of experts. But while defaults are essential, making small active changes to your pension — particularly increasing contribution levels — can have a significant impact.”

The problem with default schemes

While the risk of leaving your money in just one fund is clear, a select and forget approach can also lead to lower returns on a well-diversified workplace scheme.

The Financial Conduct Authority, the City regulator, has raised concerns that millions are being auto-enrolled into workplace pension schemes that don’t match their needs. In January it said it wants pension schemes to publish transparent data on their performance, costs and service quality.

Lily Megson-Harvey from the advice firm My Pension Expert said:

“Not every workplace pension grows at the same rate. While that may be concerning for some savers, it also highlights the importance of staying engaged with your retirement savings.”

Workplace pensions often utilise an automated strategy, called “lifestyling”, which matches risk to your age. In your younger years the scheme is “ambitious”, which allocates most of your money to equities, to generate maximum growth and benefit from the many years of compounding interest ahead, because you have time to weather any short-term volatility in the stock market.

As you approach your target retirement age, the scheme starts to take less risk, shifting your capital away from volatile stocks and into more stable assets, such as bonds, gilts and cash. This is designed to protect the gains made in earlier years and ensure a sudden crash right before you retire doesn’t wipe out a big chunk of your life savings.

But millions of workers may find themselves in a one-size-fits-all default scheme that is too cautious for them, especially if they are young and have decades until retirement. Being too cautious too early can leave a huge dent in their eventual retirement pot.

averages to see how it measures up. It’s also important to track down old workplace pensions and check if consolidating them makes sense, so you aren’t paying multiple sets of fees.

Most workplace pension schemes offer a range of investing options, so if you feel like it is a bad match for your personal risk appetite and retirement goals, you can move to something else.

“But this isn’t a decision to take on a whim,”

said Craig Rickman from the investment platform Interactive Investor.

“Do your research first and foremost, checking if your scheme has indeed stacked up unfavourably against its peers and/or its benchmark over a reasonable period, and making sure comparisons are on a like-for-like basis”

Crucially, just because a fund, region or sector is riding high now does not mean it will continue to do so. Investing is a long-term game, especially if you are trying to build enough wealth to live on in your later years.

“Constantly churning your long-term investments to chase the best-performing funds is not only a chore but can do more harm than good,”

Rickman said.

All graphs have been provided by Investing Insiders

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Will US insurers buy out our pensions with recycled Blue Owl private credit?

Posted on February 20, 2026 by henry tapper

This is a ramping up of an investment crisis which is growing in the USA but thankfully not in the UK and Europe.

Private credit group Blue Owl will permanently restrict investors from withdrawing their cash from its inaugural private retail debt fund, backtracking from an earlier plan to reopen to redemptions this quarter.

This is a spectacular about return from one of America’s largest private equity fund managers

The New York investment group on Wednesday said investors in Blue Owl Capital Corp II would no longer be able to redeem their investments in quarterly intervals but that the company would instead return investors’ capital in episodic payments as it sells down assets in coming quarters and years.

And the FT is making its readers just what this means

The decision underlines the risks facing retail investors, who have ploughed hundreds of billions of dollars into funds with limited liquidity rights.

It’s also a big problem for Blue Owl which is suffering a loss of confidence from its shareholders and the market.

This is not good for shareholders and it certainly isn’t good for retail customers

So where is Blue Owl going to be able to sell its private bond assets to get the liquidity to satisfy its retail customers?

It [Blue Owl]said pension funds and insurance companies would buy the loans at an average of 99.8 per cent of their carrying value using new vehicles to be managed by Blue Owl.

Surely they don’t mean the pension and insurance companies that have been buying into and buying out our UK pension schemes?

If I was the PRA, I would be looking long and hard at what is happening with Blue Owl because if these private market bonds are being relied on to pay UK pensions , they should be very worried indeed.

The lock in of Blue Owl’s Capital Corp II’s retail investors, comes at a bad time

Wednesday’s deal comes amid heightened scrutiny into the quality of private credit loans after a number of high-profile defaults and rising fears over the exposures portfolios have to software companies vulnerable to AI disruption.

We have been selling UK insurers to American insurers. They include PIC, Just and Utmost. American buy-out money is cheap but is it backed by private credit that will never be repaid? Blue Owl worries me a lot.

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McPhail; “don’t rely on state pension if you’re young”.

Posted on February 20, 2026 by henry tapper

The state pension in its current form is unsustainable, both fiscally and politically. I don’t think it should be scrapped but its inexorable upward increase has to be curbed. Over time, its value should drop back and means-tested post retirement welfare should take up the slack: less universal benefits, more targeted. Tom McPhail on Linked in

Tom McPhail

I’m not scaremongering. A means-tested state pension is inevitable

We need to aim our limited welfare budget at those who genuinely need it

Given the increasingly dire state of the economy, a means-tested state pension might now be inevitable.

I’ve argued before in these pages that a possible solution could involve increasing the state pension age to 75, and it’s fair to say this met with some resistance. But would means-testing it be a better alternative?

If you are minded to dismiss this speculation as mere scaremongering, consider the facts. In 1970 there were roughly five workers paying into the tax system for every retired person. Today the ratio is three to one and by 2070 it is expected to be two to one. The state pension costs about £150 billion a year, an increase of about 60 per cent in the past ten years, driven by the generous triple lock as well as the demands of a growing pensioner population.

The state pension already accounts for more than 40 per cent of our welfare budget, according to the Office for Budget Responsibility (OBR), and its cost is expected to rise further. The OBR predicts that spending on the state pension will rise from about 5 per cent of GDP today to 7.7 per cent by the early 2070s. This is not sustainable.

Many pensioners absolutely need and rely on their state pension. We can’t let them down. Pensioner poverty is still a problem, particularly for older, single pensioners.

Pensioner affluence is a thing too though. I have seen first-hand many pensioners who enjoy, but who also absolutely do not need, the £10,000 to £15,000 a year that they get from the state. Many of today’s pensioners own their own home and enjoyed the benefits of working lives building up guaranteed pensions through the latter part of the 20th century.

Wealth taxes have been espoused by some populist agitators, but before we go down that road, maybe we should simply ask why we hand out triple-locked welfare payments to those who don’t need it?

The triple lock has increased the state pension by the higher of inflation, wage growth or 2.5 per cent each year since 2012. And this increasing cost comes against a backdrop of stagnant per capita economic growth, which has averaged less than 1 per cent a year over the past 25 years.

There has been much discussion in the news recently about the usurious cost of student debt, with the government charging interest rates that would make a mafia loan shark blush. Those same graduates now face an uncertain job market and impossibly high house prices: in what reality does it seem fair to keep taxing them to pay for today’s pensioners?

Our national debt is fast approaching 100 per cent of our annual economic output. The cost of servicing that debt is now more than £100 billion a year. We spend more on debt interest than we do on education, more than we spend on transport and defence combined. In only a handful of years over the last few decades has the government actually managed to reduce our debt. The default setting is to borrow, borrow, and borrow more every year. This too is unsustainable. The imperative for economic growth and reduced public spending demands hard choices of our politicians.

And how could means-testing the state pension work? We already have pension credit, a means-tested top up for pensioners on low incomes, which only costs about £6 billion a year. It could be possible to dispense with the triple lock and deliberately allow the state pension to fall back in real terms, while at the same time significantly increasing the generosity of pension credit. This would target our limited welfare budget towards those who genuinely need it.

Politically, this is fraught with danger, given pensioners’ electoral clout. But if not this, then what is the answer? A change to the system is essential and inevitable. Sooner or later some brave or unlucky politician is going to have to grasp this nettle. In the meantime, the younger you are, the less reliance I would advise you to place on the state to see you through retirement.
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Tending wanted growth, weeding where needed; the policy maker’s a gardener

Posted on February 20, 2026 by henry tapper

Policy-making as gardening

 

Policy-makers must be more like gardeners than mechanics says Chris Dillow

“Those who cannot remember the past are condemned to repeat it”

said George Santayana. Such has been the fate of Sir Keir Starmer, who recently said:

My experience as Prime Minister is of frustration that every time I go to pull a lever, there are a whole bunch of regulations, consultations and arm’s length bodies that mean the action from pulling the lever to delivery is longer than I think it ought to be, which is among the reasons I want to cut down on regulation generally and within Government.

He is not of course the first minister to discover this. The diaries of Tony Benn and Richard Crossman express frustration at the difficulty of getting things done. And in 1999 Tony Blair spoke of having “scars on my back” from trying to reform public services. Writing in 2008 David Richards, David Blunkett and Helen Mathers described (pdf) three decades of frustration with policy-making:

A minister might pull a policy lever only to discover later that it has not had the desired effect.

In believing that there are such levers politicians are following some defunct economist. In 1949 Bill Phillips built a machine which, he thought, represented the economy. Partly, it did; it showed the circular flow of income and it reminded us that the economy is not an act of nature but a creation of humankind – and what humans can create they can change. But partly it did not, as it omitted important things such as inequality, environmental degradation, supply shocks, growth and innovation.

Polly McKenzie draws an inference from all this – that the “levers of government” is an unhelpful dead metaphor:

The economy is not a thing but an aggregation of billions of decisions, each made on the basis of incentives, opportunities and desires…Government has tools, it’s just that they are not mechanically connected into that system like a lever is.

Giles Wilkes agrees:

All physical analogies for working on the economy are misleading and imply the sort of direct causality, measurability, clear categories and obvious relationships that barely ever applies.

They’re right.

But, but, but. As George Lakoff has shown, metaphorical thinking is ubiquitous. When we confront abstractions such as the economy, politics, nature, or moral questions, we use metaphors to try to make sense of them. Asking us to forego all metaphors is a counsel of perfection. Metaphors are like models (in fact, models are metaphors): all are wrong, but some are useful in some contexts.

On the basis that it takes a metaphor to kill a metaphor, but subject to that caveat, I’d suggest an alternative – to regard the economy and society not as a machine but as a garden.

For one thing, you do not make a garden just as you choose. You cannot simply impose a vision. What you grow depends upon the type of soil; how much sun you get; how long your growing season is; how much space you have and so on. You need to work with what you’ve got, not against it. It’s similar in policy-making. You need to work with and through civil servants, not merely rail against the “blob”. And you must remember Burke’s words:

Circumstances (which with some gentlemen pass for nothing) give in reality to every political principle its distinguishing colour, and discriminating effect. The circumstances are what render every civil and political scheme beneficial or noxious to mankind.

This was one way in which Truss went wrong. Fiscally expansionary tax cuts might have worked in a depression. But they didn’t when markets were worrying about inflation. The circumstances rendered her scheme noxious.

Truss is mad, but this government is guilty of something similar. The UK economy’s comparative advantage lies to a large degree in higher education and creative industries; these are some of our garden’s most succesful plants.

But the government is putting weedkiller onto these by taxing overseas students; allowing nibmys to close down music venues; making it harder for musicians to tour Europe; and allowing tech companies to steal writers’ work.

Meanwhile it is also trying to grow flowers that are not well-suited by subsiding steel and chemical industries, like trying to grow a mediterranean garden in north-facing clay soil.

“Cut your losers and run your winners”

applies in gardening as well as investing. The government seems not to realize this.

Both gardening and policy-making are forms of guided emergence. Societies are the product of human actions but not of human design, which is why the machine metaphor is at best only half-right. Similarly, gardeners cannot easily predict exactly how their garden will look because of course the weather (among other things) will intervene. What they can do is simply create the best chances for plants to thrive by feeding and watering them properly, and putting them in the right light and soil. So it is with governments. They can provide the right conditions for a thriving people and economy (to a much greater extent than it is actually doing so now) but they cannot guarantee that they will indeed thrive.

This is not to say that conditions are always a binding constraint. Gardeners prepare soil by mulching and composting, or improving the drainage of clay soils or by changing the acidity of the soil. Good politicians do something similar; they know that public opinion is not a fixed datum but is something malleable.

In Thinking the Unthinkable Richard Cockett describes how thinktanks such as the IEA and CPS spent years preparing the ideological ground for Thatcherism. And Thatcher herself did not immediately embark upon that project; it was not until her second term of office that she began serious privatization and attacks on the NUM. You must plant at the right time.

Her epigones, however, have not been so wise. Osborne and Cameron failed to cut the size of the state in part because they never made a serious ideological case for doing so or had a means of identifying genuine waste, instead hiding behind mindless drivel about the “nation’s credit card”. And Starmer did not devote enough effort in opposition to understanding just how effort much is needed to repair the economy and public services.

Some constraints are binding; the neighbour’s fence or the position of the sun. Others are not so much. Equally, politicians must know what’s a binding constraint and what isn’t.

A further parallel between gardening and politics is that in both, change takes time. All gardeners know the need for patience, if only because it can take years for plants to grow. The same is true of social change. Shifting tens of thousands of people from some jobs to others takes a long time. One of the right’s consistent errors has been to under-appreciate this. Just as it was wrong to think unemployed miners in the 80s would soon find new jobs, so it wrongly though that companies could quickly divert trade efforts from the EU to non-EU countries. But economies and people don’t work this way. Change takes time.

Which leads to another similarity between gardening and policy-making. Gardens are almost never perfect; there are always some plants that aren’t (yet) thriving. Similarly, there is, as Adam Smith said, “a great deal of ruin in a nation.” Which is inevitable, because there are trade-offs. Do you want a benefit system that errs on the side of generosity or meanness? Do you want efficient public services or ones that have some slack in them to respond to emergencies? Do you want a simple tax system with some inequities, or a more complicated one with deadweight costs?

Some things, therefore, we must just live with. In gardening, said Gertrude Jekyll, “one has not only to acquire a knowledge of what to do, but also to gain some wisdom in perceiving what it is well to let alone.” At this time of year, for example, it’s tempting to start weeding – and in doing so to dig up perennials by accident. Echoing her, the late John Cushnie would often tell listeners to Gardeners’ Question Time:

“it’s not worth the bother.”

Politicians, by contrast, rarely heed this, preferring, in Jaap Stam’s words, to be “busy cunts.”

There’s one more similarity. Gardening isn’t only about encouraging growth. We also need to destroy things – to kill weeds and pests; to prune branches; and even to cut out whole plants. Sometimes, we need a chainsaw.

The same is true of politics: you must not only cultivate client groups but also weaken or destroy opposing interests, as Thatcher, for example, attacked trades unions. Politics isn’t only about technocratic fixes, hawking product like market traders, and TV soundbites. It is about forming and weakening interest groups.

In this respect, Shakespeare knew more than we know today, our brains having been addled by moronic current affairs shows. In Richard II he has a gardener say of Richard:

O, what pity is it
That he had not so trimmed and dressed his land
As we this garden! We at time of year
Do wound the bark, the skin of our fruit trees,
Lest, being overproud in sap and blood,
With too much riches it confound itself.
Had he done so to great and growing men,
They might have lived to bear and he to taste
Their fruits of duty. Superfluous branches
We lop away, that bearing boughs may live.
Had he done so, himself had borne the crown,
Which waste of idle hours hath quite thrown down (Act 3 scene 4).

Bolingbroke spoke of  enemies as pests:

The caterpillars of the commonwealth,
Which I have sworn to weed and pluck away.

He had them killed. Like nature, politics is and has to be red in tooth and claw.

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