THE Shadow Chancellor called for a pensions market shake-up to encourage greater investment in British companies and reignite economic growth.
With less than a fortnight to the Autumn Statement, Rachel Reeves briefed journalists on some of her plans to boost the country and pensioners’ finances.
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On the same day as the reshuffle, Ms Reeves claimed that her reforms could boost typical pension pots by £30,000.
This is based on an average 22-year-old putting seven to 12 per cent of their salary into a company pension and being matched by the company.
Ms Reeves said that this lift could be achieved by unlocking pension funds’ capital to invest in the British economy and increase returns for savers.
She has urged the introduction of a French-style scheme which makes it easier for defined contribution pension funds to invest in UK growth assets alongside the British Business Bank.
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The British Business Bank was set up in 2014 to lend money and buy stakes in smaller UK businesses.
Ms Reeves argued it would help small, innovative firms remain in the UK, rather than have to shift abroad to get financial backing.
She said she would push The Pensions Regulator to “do its job properly” and consolidate the industry.
She said: “It is no surprise that people are not getting good value when there are 27,000 defined contribution schemes.”
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And she emphatically insisted she did not have plans to raise taxes.
She added: “I’m not thinking about how can we tax people more, it’s about how we can grow the economy to improve living standards.”
ANALYSIS
BRITISH pension funds’ investment in British listed companies has dwindled to from 53 per cent to just 6 per cent in three decades.
The result is British firms can’t get as much investor support as they can from overseas.
That means UK companies are valued lower, there is less investment in the UK and lower returns in our pension.
Simon French, of Panmure Gordon, reckons a company investing in London will be priced 23 per cent cheaper than if it went for the US.
But why should our British funds invest in the stock market? With high interest rates investors can get 6 per cent on their cash.
Recent listings like CAB Payments have short-changed the City.
Telling the pension industry to back Britain is a hard sell right now.
BAE WAR DIVIDEND
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BRITISH defence giant BAE Systems has booked £30billion in orders as a result of the Ukraine War and Israel-Hamas conflict, it has revealed.
It has taken another £10billion in the last few weeks since the end of the half year after boss Charles Woodburn predicted the “elevated global threat environment” would bring in business.
BAE has also won £3.9billion of funding for the UK’s nuclear-powered submarine programme.
Its factory in Rochester, Kent, was last week targeted by pro-Palestinian protesters.
SELLERS’ £6K DROP
HOUSE sellers are cutting asking prices by the most since 2018 — buyers bagging average reductions of £6,088.
Rightmove has recorded a 1.7 per cent drop this month, the most in five years. However, prices are still only 3 per cent off their peak. They rocketed 25 per cent during Covid.
Rightmove said agreed house sale numbers were 10 per cent down on 2019, with higher mortgage costs stretching chain deals.
LATE POST LEADS TO £5.6M FINE
ROYAL Mail has been fined £5.6 million after a quarter of first-class post took longer than a day to arrive last year.
Regulator Ofcom found only 73.37 per cent of first-class mail was delivered on time. This compares with 90 per cent of second class post — which also missed its objective.
Royal Mail is meant to deliver 93 per cent of first class mail within one working day and 98.5 per cent of second class within three days.
It blamed last year’s postie strikes for disruption.
Ofcom said that even adjusting stats to allow for industrial action, bad weather and the impact of the runway closure at Stansted Airport the levels were only rated at 82 and 95.5 per cent.
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Royal Mail said that it had been an “uniquely challenging” year for the company.
The poor service will be a sting to letter-writers who have seen the price of a first class stamp hiked from 85p last year to £1.25 last month.
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SHOP STAFF WOE
ATTACKS on shop staff are increasing — with two in five shouted at, spat on, threatened or hit every week.
Nearly half feel unsafe at work, a Retail Trust poll of almost 1,600 shop staff found.
Two in three have faced abuse when confronting a thief. Shoplifting cases are up a quarter in the past year, retailers blaming the surge on lack of police response and the cost of living.
Hants-based store manager Julie, 61, said: “I’ve worked in retail for 23 years and I’ve never known it so bad.”
