Labour wants to dictate where your pension gets invested!

[Watchthis]

Read about this tonight, Labour want to have the power to force your private pension provider to invest where they dictate. It's been approved and now heads to the house of Lords now.

[TomTheTyke]

Well, to be fair, we are a democracy and the report I read includes a direct quote from the Tories saying they’d repeal it. Form an orderly queue to vote for them.

[Terminator X]

Lot of MP's against it but easy for Labour to vote it through.

Constantly amazed at all the non manifesto items they can just simply push through when no one effectively voted them in on it.

TX.

[RSTurboPaul]

ISTR that in a similar vein, the EU apparently want to use your bank deposits / savings to 'borrow' and invest as they see fit 'because you're not using them right now, are you?'

[hidetheelephants]

RSTurboPaul said:

ISTR that in a similar vein, the EU apparently want to use your bank deposits / savings to 'borrow' and invest as they see fit 'because you're not using them right now, are you?'

Except the bank they're deposited with is using them? That's the entire premise of retail banking?

[Rufus Stone]

Watchthis said:

Read about this tonight, Labour want to have the power to force your private pension provider to invest where they dictate. It's been approved and now heads to the house of Lords now.

What's the proposal?

You will appreciate there is a raft of legislation already in relation to pensions, mainly dictating what you cannot invest in though.

[Inlineonline]

The ISA cash limit sounds draconian but for the vast majority of people if they have more than £12k per year to invest, putting it in cash is a terrible idea anyway, a long term low cost diversified tracker is usually the best choice.

The trouble is though, by making it all sound complicated with multiple rules, the less financially literate will be put off investing at all and over decades that’s a massive lost opportunity.

Over the past 20, 50, 100 years, whatever time period you choose assets (and specifically equities) have grown far faster than bonds, cash, inflation or wages, and so the people who hold assets have become massively wealthier compared to the majority who simply rely on a wage.

[IJWS15]

Wonder what the pensions regulator thinks about it!

A year from retirement Rachel from accounts wants it in UK shares but the regulator would advise cash/treasury bonds etc!

[Rufus Stone]

IJWS15 said:

Wonder what the pensions regulator thinks about it!

A year from retirement Rachel from accounts wants it in UK shares but the regulator would advise cash/treasury bonds etc!

TPR is now just a mouthpiece for the Government.

[Blue_star]

All developed countries dictate where pensions are invested. Otherwise too many scams and ponzy schemes happen. This is very well known.

Nigel voters really do come up with stupid st to say nowadays.

Op, Wait till you hear about the socialist Basel records that eurocrats put upon our banks, damaging national interest…

[Uncle boshy]

Blue_star said:

All developed countries dictate where pensions are invested. Otherwise too many scams and ponzy schemes happen. This is very well known.

Nigel voters really do come up with stupid st to say nowadays.

Op, Wait till you hear about the socialist Basel records that eurocrats put upon our banks, damaging national interest

Most developed countries do indeed have regulation to avoid rogue investments and the uk already has this.

However what’s changed in the lasted government pension reform is that the government reserve the right to tell fund managers which geographies and assets they must invest in. So your fund manager today might choose to invest in say global tech stocks because of fund performance, but the uk government say you can’t do that, you must invest in say uk house building stocks .

In the immediate term no real change, but politicians aren’t always known for their financial trustworthiness and the risk that a future government of any colour might choose to push and agenda using your pension investment.

The key point being that a government might sacrifice your pension investment performance for political gain.

[Inlineonline]

What about the ability to shift a greater portion of your sipp or isa into bonds or cash funds at times of heightened risk (either persona or global) which is part of good risk management. The government want to tax you if you do this which may lead to bad tax led decision making.

It’s all too meddlesome to be good

[Groomio]

"After widespread opposition, largely from the pensions industry, the Government watered down the proposal to ensure it mirrored the Mansion House Accord – retaining the power to force schemes to invest, but only for 10pc of their assets and 5pc in Britain – and MPs approved it by 276 votes to 155."

https://www.telegraph.co.uk/money/pensions/news/la...

[Crumpet]

Groomio said:

"After widespread opposition, largely from the pensions industry, the Government watered down the proposal to ensure it mirrored the Mansion House Accord retaining the power to force schemes to invest, but only for 10pc of their assets and 5pc in Britain and MPs approved it by 276 votes to 155."

https://www.telegraph.co.uk/money/pensions/news/la...

Does that mean that if, for example, your default SIPP fund is something like the HL Growth Fund (11.1% UK), there will be little to no change?

It’s getting really difficult to pick apart the news stories these days as it’s all effectively click bait. I say that after clicking on ‘What Would Happen if Putin Attacked The UK - Day by Day’ this morning - that one was easy; it’s absolute fking toss.

[Panamax]

This sort of rubbish falls at the first hurdle. What is meant by "investing in Britain"?

(a) Shares in your local corner shop?

(a) Shares in a FTSE 100 company, most of whose business is in foreign countries?

[I Like Tea]

I’m not an expert, but isn’t this to help with access to capital for British businesses and reduce the capital flow to other territories? So at a national level a good thing surely? Although at the personal level I do see that it reduces choice.

[-Cappo-]

I live very comfortably off my SIPP; I’ve taken the 25% TFLS and currently also had over 5 years of a very decent monthly income, and here’s the rub: my pot today is worth more than it was the day I retired (world events notwithstanding). But no, it’s absolutely not all invested in the UK - which may well be a factor in how it is performing.

Are Labour really saying that they would legislate to change where my money is invested?

[Inlineonline]

-Cappo- said:

I live very comfortably off my SIPP; I ve taken the 25% TFLS and currently also had over 5 years of a very decent monthly income, and here s the rub: my pot today is worth more than it was the day I retired (world events notwithstanding). But no, it s absolutely not all invested in the UK - which may well be a factor in how it is performing.

Are Labour really saying that they would legislate to change where my money is invested?

I think that they are saying that if the Government provides a tax incentive (eg ISA, or tac free pension contributions) then they are entitled to have some say in how the funds are invested.

That's actually not unreasonable. Any suggestion that taxed and taxable investments should be controlled would be massive overreach though.

But it is a bit elitist in that the little people get told how and where to invest while the more sophisticated wealthy investors will go where the returns are and used other methods to maximise tax efficiency.

[Rufus Stone]

It appears not to be filtering down to the SIPP & SSAS level, at least not yet.

https://www.gov.uk/government/publications/pension...

"The Pensions Investment Review was launched by the Chancellor on 20 July 2024 with the objectives of tackling fragmentation, boosting investment, increasing saver returns and addressing waste in the pensions system. It looked across the multi-employer Defined Contribution workplace (DC) pensions market and another key part of our pensions landscape: the Local Government Pension Scheme (LGPS)."

[bmwmike]

By 2035. I'll aim to be drawing my SIPP by then anyway.

Hopefully it gets withdrawn by then anyway.

Another nail for Labour as they just cannot leave it alone can they? Endless meddling and poking around in stuff that is none of their business.

Someone above said the government have a right because they are offering incentives. bks. The incentive of a SIPP is deferred taxation, no other benefit for the person. For the state, the benefit - goal - is people being self sufficient in retirement, and able to continue spending in the economy to keep the ponzi scheme going.