It’s the same the other side of the pond; many older people can’t make ends meet

Posted on May 10, 2026 by henry tapper

I have made the point before and will, I’m sure, make it many times to come. People when they retire, lose their work income and switch to income from investments which they think of as their pension. That money can come from house lets or from inherited capital or it can come from savings in a pension plan, but unless that pension plan lasts as long as you need it to last, you may find yourself “fired from retirement” and having to return to work.

There is no relief for older people from inflation. We still have to pay for energy to heat our house and drive our cars, food in the supermarket goes up and up and many of us have to buy on the yellow label to make ends meet. We have council tax to pay,

This is reality not just for those in the United States of America. The FCA research in this country, conducted by Ignition House, tells us that the most common destination of pension pots is into bank accounts and too often it is spent too early. This is why the Government is using its Pension Schemes Act to require workplace pensions to default people into retirement income which should last as long as they do. Nest, which has 98% of its 14m savers following whatever default it gives them has got permission this weeks to offer them a flex and fix plan which looks as close to a pension as a DC plan can do!

Of course, if there is not enough in the Nest pot to pay the income people need to keep them “getting fired from retirement” then there is a problem. Many people will retire on inadequate income and will have to raid their pension pots and when they’ve done that they’ll still have to return to work.

The author of the survey and accompanying report

In a recent survey of 2,500 people in Britain, the most important thing to ordinary people was that state pensions grew at least as fast as inflation and (with the triple lock) in some years faster. People know they cannot live on the state pension but they know it is theirs forever and for their partners when “forever” ends.

The report’s by Andrew Harrop and he finds that people are self centered , demanding that as much of the money going to people’s retirement, goes to keeping them from being fired from retirement.

I don’t want to disappoint those who think that engagement will get them there but for most of those interviewed they expected to have things done for them.

Infact the two things that people didn’t fancy was having to make their more of their own pension contributions and lose their anticipated state pension increases (the columns going to the left and at the bottom).

In the trade-offs between getting fired from retirement and getting more of their pay deferred, people will accept getting it done for them – even though most people know that that leaves less money for negotiating better pay rises today.

We think of improving our pensions as a way of protecting ourselves from being fired in retirement and returning to work. This is what goes through their minds as they read the holiday brochures and the price page at the back.

All of this spells out that people will be prepared to pay taxes in return for security later in life; whether these taxes go to accrue state pension or to accrue private pension, they expect to have a plan to keep them from returning to work after being fired from retirement

 

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Google DeepMind or Thames Water? Can you or your employer’s DC “workplace pension” take the risk?

Posted on May 10, 2026 by henry tapper

Jo Cumbo is spot on here;

I am sure that Jo is furious that pension mandation could leave some schemes the worse for doing what they had to do. She sees things through the eyes of employers and through those of people like her who may find their DC pot damaged by risks taken to meet the Mansion House Accord and pensions mandation.

But the problem for saver and for the employer is not just that the investment went wrong, it is that the person who takes all the risk is the saver – on his or her own.

The real damage to pensions is not that sometimes pension investments go wrong. It is that there is no-one to pay the cost but the member. That is DC pension’s fault. It need not be that way. Take USS who crazily followed into investment into Thames Water at the wrong time and lost the fund a fortune picking up the cost of pillaging by Private Equity firm McQuarrie. Here the cost has been felt in poor performance but not in decreased pensions. If that investment had been a large part of USS’ DC scheme then all the risk would have been taken by academics.

Because it does not share risk across different pensioners , some quite young , some in receipt of pensions, Defined Contribution “pension” scheme leave savers exposed to muck-ups like Thames Water. BTW Thames Water is a classic stock and bond that sits within the assets covered by the Mansion House Accord.

For every Thames Water there are British success stories like DeepMind that if they had been kept in the UK through DC pension fund investment, would be making people like Jo and me (DC investors) a lot of money.

Google DeepMind, trading as Google DeepMind or simply DeepMind, is a British-American artificial intelligence (AI) research laboratory which serves as a subsidiary of Alphabet Inc. Founded in the UK in 2010, it was acquired by Google in 2014[8] and merged with Google AI‘s Google Brain division to become Google DeepMind in April 2023.

The company was acquired by Google in 2014 for about $600 million. However, its current value could be in the billions due to its significant contributions to various sectors, including healthcare and gaming. DeepMind’s innovations enhance Google products, indirectly boosting revenue, which adds to its overall valuation.

Neither investment looked what it turned out to be.

Google’s made a fortune out of DeepMind, while USS has lost a fortune on Thames Water. One was smart, the other wasn’t.

Employers should be terrified with the prospect of choosing a DC workplace pension that buys into an asset that gives it the reputation of a Maxwell when it had no influence in the mistake. This is Jo’s point (though she doesn’t consider the loss of opportunity from Deep Mind!).

What she is actually saying is that DC pensions are the wrong place to expose individuals because there is no fall back for them, no-one to share the risk with. They are simply at risk from the Mansion House Accord and she is right.

Sharing the risk as a DB scheme

There have been well invested and poorly invested DB pensions; USS has turned out to be badly invested but it still has done well enough to pay its pensions in full and now charges less to sponsors for the guarantees as the markets improve, the discount rates work in their favour, liabilities (sadly) aren’t increasing as expected (profs aren’t living longer as expected). Many DB schemes have surpluses, these could prove to be ephemeral and in truth they were much better funded before October 2022 but that’s another story!

We cannot rely going forward for a DB pension unless we already have one paying or to pay. We will only have one accruing if we have a strong covenant like the tax-payer – that includes LGPS. USS is not supported by tax but relies for getting paid from income that comes from Government and student loans. Private companies will not take such risk and such risk includes the chance of buying into Thames Water.

Sharing the risk as a DC scheme

But for every Thames Water there is a Deep Mind and CDC is able to take the time to make money out of the Mansion House Accord. It can hold assets over time and doesn’t have to liquidate as DC schemes must, to meet the encashment needs of people like Jo and me who hold our pots exposed. Our employers, in Jo’s case FT , in mine a consultancy now Gallagher and an insurance company called Eagle Star (now Zurich) are not on the hook for a Thames Water when auto-enrolling us into DC pots.

They should consider leaving DC and re-establishing workplace pensions under CDC where the risks of a Thames Water are spread around a wide group of pensioners and pension savers. They shouldn’t do this just to reduce the risks of the DC pension scheme (though that comes into it) , they should choose a CDC scheme as their  workplace as they will pay more in retirement than DC schemes (up to 60% more says the DWP ,  actuarial firms and the PPI). Even if 60% isn’t achieved for you, you are taking a risk that is spread, the volatility of a CDC pension is reduced and the chances of a CDC pension ever going down year to year is reckoned to be 2 years in the last 100.

I am quite sure that CDC will muck up as DB and DC plans will do, I would rather employers took all the risk but that isn’t going to happen and if they did , the cost would come out of how much I’m paid.

The best way to cope with risk is to take it and then share it. CDC does this brilliantly. We can have our Deep Minds working for us and live with the losses of Thames Water. In the long term we need to take risks to get growth and CDC gives us time to do so!

The Mansion House investment style works well  for CDC pensions but not so well for DC pots

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Birmingham shoots itself in the foot; now the Daily Mail exposes the pension folly

Posted on May 10, 2026 by henry tapper

Patrick Tooher explains to Daily Mail readers in “This is Money”, the stupidity of the Birmingham’s LGPS management team. I have written about this over the past 18 months, often with the help of John Clancy. The Birmingham situation shows  the arrogance of pension people that  have allowed this situation to continue. Now the game is up- Reform UK are now in charge of Birmingham’s council.

Taxpayers ‘fleeced’ in Birmingham City Council pension fund blunder

By PATRICK TOOHER, CONSULTANT CITY EDITOR

Updated: 

Britain’s largest local authority overpaid more than £600 million into its pension fund after being ordered to pump the emergency cash into a hole that ‘never existed‘ leaving taxpayers ‘fleeced‘, its former leader claimed this weekend.

Birmingham City Council, which until last week was run by Labour for 14 years, declared itself effectively bankrupt in 2023 after being handed a huge bill to settle historical equal pay claims made by thousands of female workers.

It made swingeing cuts to public services to cover the costs in a move that led to the ongoing 14-month bin strike.

However, the cash-strapped council would have staved off bankruptcy but for an accounting blunder by its pension fund managers that led to unnecessary top-up payments into the scheme, said former council leader and public sector pensions expert Professor John Clancy.

‘It’s scandalous but the greater scandal is the lack of public scrutiny that allowed this to happen,’

he told The Mail on Sunday.

Clancy claims West Midlands Pension Fund, which manages the council’s retirement plan, miscalculated over a decade how much it should pay into the pot to repair an apparent funding shortfall in the scheme.

'Fleeced': Birmingham City Council overpaid more than £600 million into its pension fund after being ordered to pump the emergency cash into a hole that 'never existed'

‘Fleeced’: Birmingham City Council overpaid more than £600 million into its pension fund after being ordered to pump the emergency cash into a hole that ‘never existed‘

The formula – known as the discount rate – is based on the expected return on investments such as equities and bonds, which in Birmingham’s case averaged a decent 6.5 per cent a year.

But the fund’s managers used a much lower discount rate of over 4 per cent, meaning its liabilities – the current cost of paying future pension promises – looked much larger than they should have been, plunging the council’s fund into the red.

Birmingham City Council and hundreds of other employers were told to increase their contributions to the pension fund to eliminate the illusory deficit

West Midlands Pension Fund is part of the £550 billion local government pension scheme (LGPS), which pays its 7 million council workers past and present a guaranteed pension based on their final or career average salary.

The LGPS is increasingly under the sway of Reform UK after making big gains in last week’s local elections. It wants to turn the scheme into a sovereign wealth fund that would ‘patriotically back Britain‘ by investing in home-grown companies and projects.

Reform’s Richard Tice also wants to use some of the LGPS’ £150 billion surplus to cut council tax by reducing town hall pension contributions. Latest figures show West Midlands Pension Fund had a £4.3 billion surplus last year, of which £1.1 billion belongs to Birmingham, calculates Clancy, who led the council between 2015 and 2017.

More than half should be handed back to taxpayers who were ‘fleeced‘, he argues.

West Midlands Pension Fund now accepts

‘the pension fund assets were increasing by 6.5 per cent a year, meaning a deficit never existed because they should have used that figure every year,’

he added.

The West Midlands Pension Fund said it ‘did not recognise the figures quoted’ without elaborating, adding its approach was ‘informed by independent professional advice‘ and it operated ‘within a robust governance framework’.

‘Some of the commentary referenced does not accurately reflect the regulatory framework, statutory valuation process or long-term responsibilities of the fund,’

a spokesman said.

My comment

Come off it Birmingham’s LGPS management. For 14 months rubbish has sat on the streets of your City. As the bags spill rotten debris, an unspent surplus sits in your pension scheme.

You put in demands on council workers and council tax payers to avoid a fictitious pension deficit. Because of guarantees, these pension payments had to be prioritised at the expense of basic services that could not be provided because the City had run out of money.

I do not like Reform’s plans and hope  they come to nought. Other parts of the LGPS who are faced with the same choices as Birmingham . They should learn from the lesson that Patrick Tooher spells out.

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Scale-ex-tricks with Nico and Darren

Posted on May 9, 2026 by henry tapper

The VFM podcast is again a discussion between the boys about legislation and in particular the comments of  the Pensions Regulator on value for money delivered by DC savings plans that aren’t up to scale. Can being considered “VFM” give sub £25bn schemes grace to stay un-consolidated?

It’s rather like the arguments that Kensington’s LGPS fund  has been making the same point when being shoe-horned into an LGPS pool.  Sometimes small schemes can win the performance stakes by sticking with passive indexed funds (as Kensington’s funds have been managed).

This of course is a problem with a value for money measure that simply picks up on performance, there will be periods that the fancy work of the likes of Nest (DC) or Border to Coast (LGPS) can be ridiculed by those who pile money into American’s Magnificent seven (Kensington’s LGPS section).

I’m sure that’s not what TPR mean to promote sub scale DC funds but it’s what small DC schemes can do if they take no positions with UK stocks and avoid the Mansion House Accord’s commitment to private funds.

This is exactly the risk that performance measured over a relatively short term throws up.

Although the blog continues for a further 40 minutes, it’s made it’s excellent point in the first five (if you discount the football chat). If you start allowing small schemes to justify themselves by VFM measurement, then we are not going to get consolidation , just continuing sub-scale DC savings schemes.

I enjoyed this gossipy discussion of politics that included rehearsal of the mandate saga (which we’re told will be overturned if Conservatives get to be in power after the next election). Stranger things have happened than of a washed out party turning things around, but not many. In the past, Nico has professed himself a supporter of the Green party. I would have thought they’d have better chance of being in power, in which case Nico can advise the Greens or perhaps become a pensions minister.

Another reason for enjoying it was that it only lasted 54 minutes (being truncated by a fire alarm in Nico’s office).

I cannot remember too much of the discussion but it seemed to revolve around the work of multi-asset managers of which BoNY has two (Newton and Insight). Apparently there’s some jeopardy running a multi-asset management fund that invests in the UK and in private funds as it could go wrong and lose the fund manager its reputation and possibly a lot of money in compensation.

Chief of Investment Options get paid a lot of money and I think for all that money they should take on some risk. Frankly , if you f@ck up a multi-asset fund then losing your job should be the least of your worries.

This is of course many miles away from what ordinary people are concerned about. But if you listened to Martin Lewis in his last week’s pension special, you’d realise Martin or any of his questioners really don’t give a damn for these niceties.

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Dr. Lacy Hunt – A Fed-Driven Liquidity Event and Oil Shock

Posted on May 9, 2026 by henry tapper

by Steve Blumenthal (Thanks Per Andelius)

In his 1970 lecture, Milton Friedman advocated a “k-percent rule,” in which the money supply should grow at a fixed, predictable rate each year to allow for natural economic growth without inflation.

Dr. Lacy Hunt has pivoted from believing that rates will decline to being concerned that inflation and interest rates are heading higher. The word concerned is an understatement.

His current alarm stems from the Fed’s abandonment of this “stable rule” mindset. In his SIC presentation this week, Lacy noted that since mid-December 2025, bank credit and “Other Deposit Liabilities” (ODL) have exploded, growing at double their historic growth rates, which is a direct violation of the stability that Friedman championed in his “Counter-Revolution.” See the Friedman video here.

Friedman’s primary conclusion was that the “invisible hand” is more effective than state intervention and that the private sector is inherently stable if the state simply controls the money supply. By abandoning this control in late 2025, Lacy argues the Fed has introduced “chaos” into what should be a self-correcting system.

Dr. Lacy Hunt’s presentation at the 2026 Strategic Investment Conference marks a significant pivot in his long-held economic thesis. Lacy is an economic legend. I’m a big fan and read his missives when he posts.

Lacy’s been bullish on bonds for as long as I can remember. I’ve been bearish on bonds, having written about a generational low in bonds back in the spring of 2020. The end of the long-term debt cycle and the likelihood that the Fed will print, print, and print even more. We’ve witnessed just that, and I believe it will continue. His investment strategy is simple: his firm invests in long-term Treasury bonds or moves 100% into short-duration Treasury Bills. He admits in his presentation that he was wrong. For the reasons outlined below, he is not 100% invested in T-Bills.

Why? Lacy argues that the U.S. is currently caught in a rare and dangerous “double shock”: a massive, unrecognized liquidity impulse from the Federal Reserve colliding with a major global oil supply disruption.

The following summary explores his analysis of these two forces, why he believes they have fundamentally changed the trajectory of inflation, and his surprising new outlook for the direction of interest rates.

A Dual-Front Crisis

  • Lacy sees two powerful inflationary engines that were sparked in late 2025 and early 2026
    • Fed Error: He pointed to a major “policy error” beginning in mid-December 2025, when the Fed began buying $40 billion in Treasury bills per month. While the Fed termed this a “technical plumbing operation,” Hunt proves it was a massive liquidity infusion that caused bank loans and leases to explode at double their historic growth rates.
    • The 2026 Oil Shock: The blockade of the Strait of Hormuz has created, Hunt calls it, the greatest structural damage to energy markets in modern times. He estimates that oil prices directly and indirectly account for 12% to 15% of the cost of living, meaning the current shock could lift the CPI by as much as 240 to 300 basis points.
  • By combining these two events, Hunt argues that the Fed has shifted the aggregate demand curve outward, just as the supply curve has shifted inward. In plain English, this has created inflationary momentum that is likely to push the CPI above 4.5%, or even 5%, in the coming months.
  • Because these shocks are global, Lacy is seeing a rapid decline in world trade volume, proceeding even faster than in previous oil shocks, which acts as a “high multiplier” for economic contraction.

The Direction of Interest Rates: A Historic Reversal

  • For the first time in over 20 years, Lacy has reversed his long-standing call for lower interest rates. His new outlook for the bond market is decidedly bearish.
  • Upward Trend in Yields: He said, in the current environment, long-term Treasury yields will trend upward.
  • Short-duration exposure: Reflecting this view, he noted that his firm has reduced its portfolio duration to under one year, seeking safety on the short end of the curve as risks to bond yields remain to the upside.
  • To stabilize the market, Hunt believes the new Fed chairman must reverse the entire $300 billion increase in the Treasury bill portfolio as quickly as possible.

Recession risk:

  • Lacy warned that “unwinding” this liquidity error, while high oil prices are destroying demand, makes a deep recession nearly unavoidable. (SB: bold emphasis mine)
  • On timing: He expects it will take five to nine months for the full weight of these shocks to pull the economy into a formal downturn.
  • Target: October 2026 to February 2027

Summary:

  • Lacy concluded that the Federal Reserve’s decision to pump liquidity into the system just before the 2026 energy crisis has created a “stagflationary” trap that can only be solved by aggressive Fed balance sheet reduction.
  • For investors, this transition means bracing for higher plateaued inflation and rising long-term yields as the economy moves toward a difficult, policy-driven recession.
  • Lacy believes the direction of interest rates following a recession will depend heavily on whether the Federal Reserve successfully “normalizes” its balance sheet.

Here is the sequence of events he expects:

  • In the near term, he expects the trend in long-term Treasury yields to remain upward due to inflationary momentum from the oil shock and prior monetary policy errors.
  • He notes that “reversing the quantitative easing” (the liquidity infusion from late 2025) will eventually lead to reverse effects on asset prices (down) and credit spreads (higher and wider).
  • Longer-term: He warned that the path to lower inflation and lower rates usually comes at a high cost. He pointed out that bringing the inflation rate down typically requires destroying demand, much like high oil prices do.

Lacy’s Post-Recession Outlook:

  • While he is currently positioned in short-term Treasuries because he expects yields to rise, he suggests that a recession will eventually burn out inflation.
  • However, he emphasized that if the Fed tries to cushion the economic pain of that recession too early, as Arthur Burns did in 1974, it risks perpetuating inflation and causing an even deeper downturn later.

In conclusion, Lacy expects rates to trend higher until the Fed aggressively drains liquidity, which will likely trigger a recession that eventually, but painfully, brings inflation and yields back down.

Per Andelius
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What do people want – and not want – when it comes to pensions

Posted on May 9, 2026 by henry tapper

 

 

This survey is  important. Thx to Andrew Harrop of Public First-relevant as it’s the public who come first, timely as it comes before the first report of the Pension Commission.

It shows that people do not want their state pension cut and want more money to be paid into their pensions (not by them, they want more money paid in by employers!). Most people want to see salary sacrifice go – they don’t see that as helping them .

The most contentious question was whether to abolish the triple lock, favoured by youngsters and opposed to older people. Don’t think that people don’t value pension increases, despite what the annuities they buy when finding out the cost of indexation.

Ahead of the Pensions Commission’s first report, polling shows the public prioritise broader pension coverage and higher employer contributions

Andrew Harrop
Apr 29, 2026

Consider this statement:

‘We will require employers to enrol all their employees into a workplace pension, including 18 to 21 year-olds and those working very few hours’

This is the most popular of seven pension policies I tested last month in a Public First poll. The words reflect one of the main options that the government’s Pensions Commission is considering: whether to widen automatic pension contributions to (almost) all employees. The public’s preference for this reform presumably reflects an intuition that pensions should be for everyone, regardless of earnings or stage of life.

We conducted the poll to understand people’s priorities for pension reform ahead of the Pensions Commission’s first report. That diagnostic paper will appear straight after the May elections, and once it is published the commission will turn its attention to solutions.

So far, almost no one has asked the public what they think about the reform options the commission is examining. This is hardly a surprise, as public engagement and understanding of pensions is low. But the poll reveals a clear pattern of preferences for pensions reform, which the commissioners and government should carefully consider.

Beyond the expansion of employee pension coverage, the next most popular policy statements are:

  • ‘We will require employers to contribute more to employees’ pensions’
  • ‘We will change pension tax relief so higher earners receive less support and lower earners receive more’

An increase in minimum employer contributions is firmly on the list of ideas the commission will examine. At the moment employers only have to contribute 3% of the slice of people’s earnings in excess of £6,240 per year. Trades unions and most of the pensions industry say employers should pay more (and many do by choice already). However, in the short term, this move is contested by employer lobby groups, following last year’s rise in National Insurance.

By contrast, the third most popular idea – reform of pension tax relief – is not really seen as being within the commission’s scope. Twenty years ago the first Pensions Commission was barred from examining the taxation of pensions and it is assumed that the Treasury is similarly resistant today. That’s a shame because pension tax relief really should be reviewed by an outside body in a holistic, empirical and considered fashion (rather than being the subject of fevered pre-Budget speculation every year). The poll suggests that the public may be more open to progressive tax reform than the pensions industry, which is mounting a stiff rearguard action in the face of fairly modest plans to cap the tax savings associated with pensions salary sacrifice.1

Chart 1: Pension policy announcements that would be most and least supported (using a max-diff methodology)

Our poll findings are based on a ‘max-diff’ methodology, rather than a simple ranking exercise. We repeatedly showed people randomised sets of four of the seven statements, and on each occasion asked them to say which policy would make them most and least supportive of a politician. Each statement was therefore evaluated hundreds of times, against all of the others, providing a far richer and more accurate reflection of public preferences. Chart 1 shows the percentage of the time that a statement was selected, positively or negatively, with the difference between these scores used to rank preferences.

Importantly, these results reflect people’s relative preferences, out of the reform options put before them. This really stands out when you look at the least popular policy:

‘We will stop planned increases in the state pension age and fund this by increasing taxes’

Raising the state pension age is not normally a particularly popular policy. But here, we find that a commitment to stop future pension age increases is disliked more than any other reform (at least when people are told it will need to be paid for by taxes).

It is no surprise that people also dislike the sixth placed policy, an increase in employee pension contributions, since this hits people in the pocket. Even though we mentioned in the poll that people can opt out of contributions, the measure attracted a negative response 30% of the time. The Pensions Commission and ministers will need to reflect on this when they think about levels of personal pension contributions.

The policy that came fifth out of seven was ‘we will introduce automatic pension enrolment for the self-employed, unless they chose to opt out’. This reform only impacts a minority of workers and it is associated with the most indifference. Of all the policies, it was selected least often (positively or negatively) and it was supported and opposed in almost equal numbers. Perhaps this gives the government some freedom of manoeuvre. I hope it does: I’ve previously written that the commission’s success will depend on whether it can develop a solution to under-saving by the self-employed.

The most contentious policy statement was ‘we will keep the ‘triple lock’ on the state pension permanently and fund this by increasing taxes’ which secured high levels of both support and opposition. It came in fourth place overall, but this reflects not mushy indifference but polarisation. Chart 2 shows how it was the least popular policy among 18 to 34 year-olds and the most popular among over-65s. All the other policies had fairly consistent levels of support across age groups.

Chart 2: Rank of pension policy preferences, by age

This poses a big question. Policy wonks are increasingly of the view that the triple lock should end sometime in the next decade, once the value of the state pension reaches a higher percentage of average earnings. This poll suggests that most younger adults could be persuaded by this. But for today’s pensioners, the triple lock remains totemic: even though our statement said the triple lock would need to be paid for by tax rises, respondents aged 65 and above selected it as their preferred policy on more than half the occasions that they saw it.

A lot more public engagement will clearly be needed as the work of the Pensions Commission continues. But the early picture painted by this poll points to a policy package that might include wider pension coverage, higher employer contributions, a pension for the self-employed and perhaps a managed end to the triple lock. But nothing can be taken for granted. The political clout of employers and current pensioners could easily stand in the way.

1

In the poll we also asked about the salary sacrifice proposal, and found that twice as many people supported (40%) as opposed (16%) the government’s plan.

Notes

Public First online opinion poll, with a nationally representative sample of UK adults (n=2,007), conducted 16 to 17 March 2026. Click here for data tables.

These findings form part of Public First’s ongoing research, policy and advisory work on pensions.

 

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How will pensions be affected by the local elections?

Posted on May 9, 2026 by henry tapper

Local politics and LGPS

I don’t think we have had time to think of the impact of new councils on old pensions but I’d expect this event to be interesting

I won’t be going this year, my media pass has been withdrawn on the basis that I am not a journalist and because I say what I think not what my editor asks me to say. This blog does not carry advertising and is not constrained. So I will speak as a council tax payer in a country that is increasingly exasperated by the failure of the organisation called the Local Government Pension Scheme. LGPS is funded by councils and others who are almost exclusively funded in their turn by ordinary people who pay council tax and similar demands on their income and savings.

The councils who are the major funders of LGPS are no longer being managed by Labour or Conservatives (or even nice Liberals) , many of these councils are being run by Reform who has no time for LGPS and the way it’s run. I don’t suppose the Green party have got to grips with LGPS but I doubt they will side with an organisation who congratulates itself for being in surplus while those who fund them are frankly furious. In case you come from Greater Manchester and are involved in LGPS take a look at who is in charge from today

This map is courtesy of The Mill, a paper emailed to Manchester people that tells them what’s going on. This is what it said last night

The scale of the beating handed to Labour in these local elections is difficult to convey just in words. You need to see numbers and maps, showing seas of red replaced by turquoise and green and yellow; you perhaps need to see the tears and feel the desolation longtime servants of the party are feeling this evening. That this defeat has been suffered in the heartland of the modern Labour Party — the stronghold atop which names like Andy Burnham, Angela Rayner, Lisa Nandy and Lucy Powell have built their reputations — is all the more harrowing.

To suppose that those who hold the council responsible for Manchester’s frustration will walk away is unlikely. The politicians named will have to revise what is being done from Westminster while the Turquoise Reform UK party get to work dismantling what they see the excesses of Manchester’s Council. The Council’s pension scheme – LGPS – will be in the cross hairs from left and right. Does the Pensions UK have an agenda that includes the thoughts of those who voted for Reform and the Green Party?

Local elections , unions and private pensions

While unions remain involved in LGPS, they are now seeing a role for them in negotiating better pensions for their members in the private sectors. for many years they have argued for a return to DB with little impact. But now they are arguing for DB lite (as I’ve heard it called) or Collective Defined Contribution or most easily CDC.

Frustrated for a quarter of a century, unions are finally getting some influence, finding that pensions can be part of collective bargaining delivering “deferred pay”.

Unions have two choices going forward. They can either continue to hide behind a Labour party that protects and funds them or they can step up and become relevant.

I hope that unions will step up and bargain hard for better pensions. There may not be a priority among hard pressed members to lose pay by contributing more or even lose out in take home so that guaranteed income can be paid them. But there is for many unions and their members an opportunity to improve pensions for staff by getting employers to move from DC to CDC.

I see unions taking a view on what has happened around the country to Labour and assert the views of their members , even if Labour cannot. We have not included unions in the discussions of what has happened to politics over the past two days but I think we should.

Unions will fight to ensure their members are protected LGPS and unfunded public pensions that , but they will press for their members in DC pensions will be upgraded to CDC pensions.

What pension impact will there be in Westminster?

Our Pensions Minister’s Swansea seat is in Gŵyr Abertawe and in Swansea, in Wales’ second city only one Labour councillor remains, the Labour leader did not get returned and Swansea is now  no longer a place of sate seats for Labour. Torsten Bell’s seat will be in jeopardy. He has an 8,500 majority in Swansea West. He will not be quite so cocky going forward

For our Pensions Minister, the tenure as a politician looks in jeopardy so we must look to what he can achieve while a minister. There is a lot to do, there is the third part of the CDC legislation (Retirement CDC) to finish. There is the secondary legislation to make the Pension Schemes Act stick. This now must become the main ambition of Torsten Bell. The Pensions Commission is for another parliament and cannot be prioritised. Labour must now use Westminster to get things done.

My three conclusions are that the local elections will galvanise the Labour party in Westminster to get things done, will spur the unions to improve pensions to become more relevant and LGPS will need to listen to a new group of councillors who will have different priorities.

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What has happened to trust in the Labour and Conservative Parties?

Posted on May 9, 2026 by henry tapper

 

There are of course two bits to how we see Governments, the first is the big international stuff and then there’s the home leagues, what happens in surgeries and hospitals, what we get back financially and the state of our roads , police and schools.  For fourteen years after 2010 when the Coalition and then Conservatives got in, we breathed in , knowing we’d nearly had a financial disaster and then a decade later we had a health disaster.

A generation has grown into adulthood knowing nothing but financial hardship, whether it be student loans, housing that forces people back to live with parents, a loss for many of a regular place to work.

What had been promised in 1997 was realised by Tony Blair and Gordon Brown, but it has not arrived from Keir Starmer and Rachel Reeves. They have run out of road in terms of support, they are now part of the problem that Conservatives left them.

Labour’s share of the national vote, as calculated by the BBC, fell to just 17 per cent, behind Reform on 26 per cent, the Greens on 18 and in line with the Conservatives. It represents the lowest combined figure the main two parties have ever recorded.

England

The FT showed a chart earlier this week that predicted just what happened, when it comes to the home leagues, we no longer have two parties but seven. We now know the Greens and the Turquoise Reformers.

I do not think we have changed the way we feel about what we support. There has long been a British nationalism that was represented by Conservatism and is now owned by Reform and Conservatism. There has long been progressive thinking , represented by Labour which is now owned by Labour, Reform and Liberals.

Many people who were nationalist were working class and they have moved to Reform, some people who were progressive have moved to Reform, from Labour and from Conservatives. Liberals have remained constant.

Scotland , Wales and Northern Ireland.

Northern Ireland is as much part of the United Kingdom as England but had no elections and has been Governed remotely, having no parliament until recently.

Scotland got its act together 19 years and though its electors seemed tired of nothing new happening, have remained the same, semi-autonomous.

But Wales has changed and so dramatically that we can now think of it as moving towards what has happened in Scotland and should have happened in Northern Ireleand.

We are as united in thinking as we are in sport – not very united UK.

In none of the parts of the UK except England, do Conservatives and Labour politicians figure very much.

It is only in foreign policy that we remain truly a United Kingdom.

The question is whether our foreign policy , for which Tories and Labour parties have all the experience, will reassert the Labour and Conservative parties as predominate when we have the next election. Starmer is seen as reasonably good at it , but is Britain really that important any more? The decline in our importance in international affairs happened long ago, we can still be used as a token of another age – wheeling out our King to appease Trump, but the best we can do is to manage our economy without interference.

We are no longer in Europe or in a strong relationship with America, China or anyone except perhaps – residually – our Commonwealth. Do you need a Labour or Conservative party to keep things going? I don’t think so. I think we could have a Green or Reform Prime Minister without losing much influence, for there is very little left of influence abroad.

What about money?

Financially we are in a poor state. We spend more money servicing our national debt than we do on defence and health. We are not growing , despite being good at much progressive business focussing on technology , medicine  and financial services. What we do well is financed increasingly by America and though we are trying to change that, we have gutted out main source of finance, pensions which is only now beginning to recognise what the Mansion House Accord should be delivering.

We have done some good things over the past quarter of a century in pensions and in benefits, but the job is only half done and while we have bolstered the state pension with the triple lock on increases, we have done a terrible job with DB and only built the front end (accumulation) of what we call DC pensions.

I am not qualified to talk about what is happening in more progressive areas of finance. Tokenisation, crypto finance and the more obscure areas of private equity and credit are beyond and me and all but a few of us financially up to it. I do not see this as UK money, it is money that flows around the world and our advantage is that people like to focus on London to do business.

 Labour and Conservatives are no longer so important

We no longer get told how to think by the Telegraph and Times (unless we’re right leaning  pensions) or the Guardian (if we’re left leaning pensioners). There are a number of other papers but for the most part we get our information through our phones and other devices (some of us still call them computers- but they’re now our conduit to disparate thinking).

Neither the Tories or Labour have got a strategy in the way that Trump has. Neither can say they own a part of social media and so Reform and the Greens have become more relevant as they are talking to us on our phones.

At a time of extreme frustration at not getting what we were promised, we – as a nation – turn to those who speak to us in a way we understand.  Zack P0lanski and Nigel Farage have the charisma and the savviness to take advantage of the failures of Governments. But now comes the hard bit, how to translate home league success into wider success making laws , representing us abroad and protecting Britain what many see as the slow invasion of our borders by illegal immigrants.

Three ways forward

There seem three ways that we could go forward (they’d call this the the three continuations if we were in TPR).

The first is that Conservatives and Labour find a way to get things right and recover

The second is coalition or consolidation, this looks most likely of the three

The third is that we have radical reform of our electoral system so that we can manage five  parties having input in Westminster. Robert Shrimsley sees continuity two as most likely

Whether we have left and right blocks still carrying Labour and Conservative names is another question. The two “major” parties, are not going to stay as they are today. It will not just be the Prime Minister who is likely to change before the next election.

 

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Lawyer Rosalind Connor on the Pensions Schemes Act 2026 – enervating

Posted on May 8, 2026 by henry tapper

It’s here and not without a struggle in the Lords and elsewhere!

This is the Parliamentary annoucement.

The Pension PlayPen never likes to miss a chance to inform, discuss and sometimes dispute. Here is an opportunity!

I have had my say on the Pension Schemes Act and the reaction there’s been on it of late. But I have no idea how Rosalind Connor feels and am looking forward to hearing her at 10.30 am next Tuesday (12th May).

Rosalind is an outspoken speaker of her mind and a regular both as speaker and from “the floor”. It will be fun.

If you want to go you can join via the Pension PlayPen website 

If you would prefer you can join directly via the link below.

The Pension Scheme Act Impact – your entry from this link

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US and British pension investors have had enough of ruining the planet

Posted on May 8, 2026 by henry tapper

The dark days of the first year of Trump’s Government in the USA saw asset managers finding ways to ditch what were being called “woke” strategies that backed reducing reliance on fossil fuels. The feeling was that pleasing Trump and his followers was more important than the sustainability of the platform. Now with the Iranian war forcing oil prices well above $100 a barrel, financiers see that the best resilience to $4 + per gallon in the American petrol tank is to invest in energy sources that don’t destroy the planet.

It would seem that the institutional investors for American funded pensions are coming out of their bomb shelters and speaking their minds

The FT is clear that this move is not going to jerk the dial , but is indicative of a feeling among American institutional investors.

The New York State Common Retirement Fund, which owns a $1.6mn stake in the oil major, told Total its decision to terminate two offshore wind leases and redirect investment into fossil fuels raised “significant concerns” regarding its strategic consistency, financial discipline and risk management, according to a letter to Total chief executive Patrick Pouyanné seen by the FT.

While the fund’s stake in Total is small and divestiture would be symbolic, the warning indicates growing resistance to the White House’s use of lease refunds to stop offshore wind projects. It also creates a bind for energy companies caught between competing political forces in the US, with Republicans trying to block renewable energy and Democrats promoting it.

American pension investors are not alone, the same is happening the other side of the pond.  Once again, BP’s strategy looks disastrously wrong. This from MSN

That’s April 9th 2026

BP has excluded a resolution filed by climate activist group Follow This from the April 23 annual general meeting, asked for permission to hold online-only annual general meetings and to retire two previous resolutions requiring company-specific climate reporting.

The LAPFF, which says it represents funds with assets worth over 425 billion pounds ($569 billion) and around 1.34% of BP’s shares, opposes all these moves.

The Follow This resolution called on BP to disclose how its strategy would perform under scenarios of declining demand for oil and gas. BP has said the resolution was invalid and would be ineffective if it were to pass at its AGM.

Referring to its plan to retire the two climate resolutions, a BP spokesperson said the oil major has had extensive engagement with its largest investors and is focused on building a more valuable company. “That’s why we are making these recommendations, to provide transparent, standardised disclosures that support clear comparisons across companies,” the spokesperson said.

There is in the City and in the country (see today’s local election results) support for a right wing movement (Reform UK) who follows the “anti-woke” mantra of Trump and his followers. But perhaps people are waking up to the reality that relying on fossil fuels for British, American – indeed of worldwide energy – is short term and highly risky.

I hope that BP sees the folly of its ways, I hope that trustees of our pension funds (whether DB, DC or CDC) set out to make our world one that the  pensioners in 50 years time will continue to find liveable. Well done to all pension trustees who say no to the abandonment of sustainable strategies, sustainable for our planet’s climate.

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