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Like many of you, I suspect, I’ve come to the view that Rachel Reeves should oversee more of my financial decisions.
I know there are people out there who have taken a dim view of the chancellor of the exchequer, what with all the National Insurance contributions rise, means testing of winter fuel allowance and efforts to chase non-doms out of the country, but I’ve been really impressed by her concern over the state of my pension pot.
Apparently she frets that I am not getting high enough returns and wants to see my providers up their game. To be fair, it’s not just me she worries about. It’s all of us with any kind of pension plan with assets the chancellor thinks might be put to better use, such as supporting government policy objectives. For those who have been distracted by other issues (Trump, Ukraine, how it was that Israel came second in Eurovision) the chancellor has been browbeating pension providers to push more of their assets under management into British investments — for the good of their customers, of course. While Canadian pension funds have been patriotically investing in sure-thing British businesses like Thames Water, our treacherous domestic funds have been letting down their customers by looking elsewhere. It’s unbelievable. Who wants to see their retirement pot frittered away on cowboy outfits like Nasdaq indices or Nvidia when we could be supporting great British entrepreneurs like Michelle Mone?
While stopping short of outright coercion, Reeves has piled pressure on pension providers with “voluntary” codes, guidelines and suggested quotas, all to push them into committing more resources to British infrastructure projects and start-ups.
Her Tory predecessor Jeremy Hunt thought something similar. There is a cross-party consensus that some of these giant pots of money need to be siphoned off into better causes than supporting our retirement. Viewed governmentally, I can see their point, but since it’s my pension, I’m inclined to look at it more personally. There is this little voice that wonders if ministers are not doing this entirely out of concern for my high returns but because someone has to invest in UK plc now we’ve Brexited and are chasing out all the billionaires.
But that is too cynical I’m sure. And if Reeves is really doing this for us, then don’t we want more of her help? Frankly, the Treasury has been too hands-off in other areas of my finances. My last holiday was quite expensive and a bit disappointing. Might I not have derived more pleasure from helping to maintain British Steel’s blast furnaces? And why stop with pension funds? The benefits could be endless. We are being left to make significant financial decisions without any input from the chancellor. I want the Office for Budget Responsibility popping round every quarter to make sure I’m not wasting money while the chief secretary of the Treasury goes through my credit card bills line by line to make sure I’m getting all my Avios points. Is this really the time to be taking out a mortgage when we might be better off investing the deposit in one of Ed Miliband’s wind farms?
I have already had some personal help thanks to a pilot scheme in which Reeves texts me with guidance about my Deliveroo orders. Following her advice, I have diverted some of my expenditure in Five Guys towards funding Sizewell C and am making do with homemade sandwiches instead. But I know Reeves is up for a more active role because she is equally concerned about my cash ISAs and is thinking about amending my tax-free allowances so I don’t waste my savings on lower-risk products and miss out on opportunities to invest in British stocks.
In fact, I’m tempted not to make any investment decisions unless the Treasury signs them off first. Although perhaps I should wait to see how the pension experiment works out. Not every government action on my behalf has worked out. Diesel cars, anyone?
There is of course a public policy argument for getting more capital into British business and British markets. So, yes, I understand the temptation. It’s not that I’m against asset allocations in the national interest, I’d just prefer the priority to be investing it in my interest. Then again, if Rachel says it’s OK . . .
Email Robert at magazineletters@ft.com
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