Hint: do it via smartphoneby Henry Tapper / November 14, 2017 / Leave a comment
Published in December 2017 issue of Prospect Magazine
I was only half serious when, earlier this year, I suggested that the Tory conference ought to discuss how to put Britain’s £2 trillion of pension wealth to good use. I think that reforms on that front would unlock the productivity problem, and government should think about how it could oil the wheels. The debate didn’t happen—I suspect it would have needed more engagement than conference could create.
The question I want to ask is the one that comes naturally to a long-term saver: “what is going to happen to my savings?”
It’s a question that’s being asked by our millennials. (My son, who studies Geography, sees the question as critical to his course.) Share Action, the shareholder advocacy group, have demonstrated that young people with a clear understanding of the social purpose of their investments are more likely to save and to keep saving.
This trend is not unique to the UK. Similar work is carried out across continents. Leading financial think tanks, including the Centre for the Study of Financial Innovation, are now dominated by discussions among international bankers of the Paris Accord, Green Bonds and the initiatives which are linking savings to sustainability.
While it was disappointing that the Conservatives hardly mentioned these issues, there is plenty of action elsewhere. Labour’s pension agenda is now focused on transparency. Efforts to get the public to understand not just what they are paying but what they are paying for, chime with pop-up groupings in the financial services community. The Transparency Task-Force, a band of financial free-thinkers, regularly earns a place on regulatory committees such as the Financial Conduct Authority. So it’s all the more surprising that the Cabinet Office and the Treasury are putting pensions on the back-burner.
We are well aware that Britain has a housing crisis—fewer people know that one of our largest housebuilders is Legal & General, the insurance company. Swathes of development made possible by L&G money. Government commitment to housebuilding is a pin-prick compared to the weight of money that L&G can deploy. Ironically, one of Theresa May’s first acts when she became prime minister was to appoint John Godfrey—a senior L&G executive—as her policymaker. His departure in the wake of this summer’s election appears to have returned the social purpose of pension funds to the arcane deliberations of specialist think-tanks.