City AM’s Post

Wise and topical words from Jo - as always.

I've been reflecting on last week’s Budget, and specifically the expectation for DC pension funds to disclose publicly the breakdown of their asset allocations, including their allocation to UK equities. Personally, I’m not sure how helpful this will be - it raises the question as to whether the Chancellor is seeking investment in UK economic activity or companies that are listed in the UK. This is an important point, if we think about the number of multi-nationals listed here in the UK but which derive most of their revenue elsewhere. It feels like this development risks conflating how pension schemes provide value for members versus how they support the UK economy. Looking back over the last five years, investments in global equities have delivered for our younger MasterTrust members particularly. And looking forward, diversification that's relevant to the life stage of each member remains important to any default strategy. Lots to discuss and think about over the coming weeks and months and I'd welcome your views! #definedcontribution #defaults #investing  

A key factor behind the decline in the number of companies listing on the UK stock market over the past two decades, and a major drag on UK growth prospects, has been the elimination of the major natural investor base in UK venture, private equity and small and mid-cap listed equities. That was, of course, UK defined-benefit pension plans, which were essentially forced into bonds to match liabilities (LDI) by, with hindsight, ill thought-out regulatory changes post the Maxwell scandal. The Mansion House Compact introduced last year was one move to alleviate the problem by encouraging Defined Contribution Pension schemes to invest 5% of their assets into such high-growth, riskier assets. Another important measure is the incoming Labour Government’s proposal to set up a UK sovereign wealth fund. Such an idea should have been implemented a couple of decades ago and indeed I had written an IPE article on this (see below). Liam Kennedy Will Hutton Rt Hon Rachel Reeves

Trustees do not have to choose between implementing a BDBN or reversionary pension to achieve their desired estate planning outcomes. https://ow.ly/WciO50S884I #SMSF #financialplanning #smstrusteenews #smsfinvestors

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Let's talk about money and retirement for a second. How do you feel about the increased NSSF rates that will come into force from February 2024? There has been a general apathy within the public regarding these statutory deductions and the government's ability to not only preserve the capital but to also grow it seeing as these funds are invested over a long period of time. The returns are usually minimal ranging from 4-5% p.a. Do you feel the government will manage your funds effectively, efficiently and prudently?

Looking for a finance process that's as smooth as the perfect pint? If you have worked in the United Kingdom, you have likely contributed to one or more company pension. As is the case for many former UK residents, keeping in contact with pension providers after emigration can be difficult. This can result in former UK residents being unaware of the value of their pension(s), the risk of the underlying investments, the age at which the pension can be accessed and various tax considerations. To assist in reconnecting you with your UK assets, get in touch for a complimentary UK asset review. The review ensures former UK residents can receive a full entitlement report. Our team is here to help! We specialise in reviewing your UK assets and making the finance process seamless for our members. So sit back, relax and let us pour you the perfect amount of financial help. Cheers to a worry-free financial future.🍻 For more information regarding our independent financial advisory services for expats and international investors. e: [email protected] #investment #retirementplanning #ukpensions #financialplanning #wealthmanagement

Investment into UK high growth start ups is down, so what’s the answer? The Mansion House Reform, who’s heard of it? 🤷🏻♂️ Supported by both sides of the house which means it must be an amazing idea right? 🤦🏼♂️ As I understand it, and in very basic terms, it means the government has agreed with workplace pension providers, to redirect some of your pension fund so you gain greater exposure to UK private equity. Currently around 1.5%, going up to c4.5% nationally. They have implemented this to help support investment into UK business and they claim it could make the average person an extra £1000 per year in growth. All sounds good but they haven’t mentioned the risks 😡 The risk that it could all go to zero, the risk of taking money out of lower asset classes in this market and the risk of making this change at different stages in people pension journey. Everyone has a different appetite to risk so passing a reform such as this which may fly under the radar seems a tad naughty. If the government wants to increase money into UK start ups, they can do so by further incentivising those who have the money, and understand the risks, rather than gambling with money of the unknowing public. #pensions #economy #ukinvestment

The investment scene in the UK is shifting, with institutional investors growing more confident about the future. Downing’s recent survey of 100 UK institutional investors, which included private defined benefit and defined contribution pension plans, public sector pension schemes, insurance asset managers and family offices revealed a notable rise in optimism about the UK market. Kostas Manolis, Partner and Head of Private Market Investments, explores the outcome of this survey and what this might mean for UK asset allocators in our recent article. 👉 Read the full insight here: https://lnkd.in/ez2yxMQQ 📩 Register for email updates: https://lnkd.in/eu52cqZJ #investment #UKeconomy #markettrends

Did you know… 🤔 In the UK, only 31% of self-employed workers are saving into a pension! 💭 Thinking of saving for the future but don’t know where to start? Talk to a financial adviser today. 📞 Approved by The Openwork Partnership on 16/08/2023 #TheOpenworkPartnership #pension #investment #savings #finances #financialadvice #financialplanning #allowances #money #wealth #personalfinance #futureplanning #financialawareness