I'll be OK... I've got a Pension through work.
- David Sharp
- Jul 3
- 5 min read
I love Leicester. I really do.
Some people would say I’m mad, and I know there’s plenty to be mopey about, but there is also some absolutely incredible things on our doorstep.
A couple of weeks ago I had the fortune of meeting somebody in Leicester for a bit of a catch up and discussion about our mutual business interests. They decided they wanted to come in on the train as it was easier for them, and of course, if we’re having a catch up there would be a couple of beers in the sunshine and therefore, I made the sensible choice and got the bus into town.
And what was lovely is that I managed to arrive a little earlier than expected and had one of those little moments where you actually look around rather than just get from one place to the next.
And Leicester still has something about it.
It’s vibrant.
It’s busy.
It’s got so many cultures living alongside each other.
It feels alive….
In the main, which was refreshing to see as last time I went in, it didn’t feel like that at all!
And let me tell you, if this is what we currently have in our city, I’m here for it.
On my travels I walked past some beautiful buildings and I acknowledge that in the summer, everything looks better, but one building I walked past was City Hall on the way to the station and thought again, that is a beautiful building.
Not entirely sure it fits in Leicestershire, but still. Here we are.
My initial thought about our Town Hall is that it more aligns to some of the grand buildings you see lining the streets around London rather than Leicester, which my busy brain then jumped to Somerset House. The fantastically elegant looking 18th century building virtually looking over the Thames in London. Similar colour, totally different style, but it’s summer, it’s a beautiful building and I’ve still not been to their open air theatre shows they do with Film4 which has been on the list for quite some time now!
Somerset House, sounds beautiful doesn’t it?
Then I started thinking about other “House” buildings.
Somerset House.
Clarence House (The Kings former residence)
Nelson Mandela House (Only Fools)
Uganda House and Canada House (I remember seeing these when I ran from Trafalgar Square for London's Winter Run)
And then my mind jumped to Mansion House.
Now unfortunately, the house game stopped there and it went into pensions, specifically, The Mansion House Accord.
Which is a completely normal jump, obviously.
Now, anyone who is employed, or is enrolled in a workplace or default pension scheme should really take note on what the Mansion House collective initiatives intend for your pensions.
The government wants more workplace pension money going into private markets and UK productive finance. Not necessarily the investment managers themselves, specifically when talking about this initiative. That isn’t to say that some investment managers don’t think it’s a good idea just to be clear here…
In my line of work, I spend a lot of time trying to understand someone’s ability to take risk.
Not just whether they say they are comfortable with it. Whether they can actually live with it, and do they mean it when they say they can’t or can or is it lip service for me being there at the time?
That’s the bit that matters.
Because if I was sat with somebody who had limited experience, limited resources, and didn’t really understand the investment, I couldn’t just say:
“Right, I’m going to put you into higher risk, harder to sell investments because it might help the UK economy.”
That would not go well. And it shouldn’t.
Even when somebody does have some additional investment money they could technically afford to lose, also known as having a capacity for loss, it can still be a challenge to make sure the risk actually makes sense for them.
Because people are not just investors. They are people.
With bills. Families. Plans. Things they want to do. Things they are scared of losing.
But in pensions, people quickly become something else.
Members.
Defaults.
Cohorts.
All very tidy words.
Not always very human ones.
And this is where, personally, I feel a little uncomfortable with the Mansion House initiatives.
The big providers have “voluntarily” agreed that by 2030 (i), they will aim to have 10% of their default funds invested in this stuff, that the Mansion House initiatives outline.
‘The voluntary initiative, to be known as the Mansion House Accord, has been jointly led by the Association of British Insurers (ABI), Pensions UK, (previously the Pensions and Lifetime Savings Association), and the City of London Corporation. It is aimed at securing better financial outcomes for DC savers through the higher potential net returns available in private markets, as well as boosting investment in the UK.’ (i)
Now private markets are not bad. That’s not the point.
They might be useful.
They might help returns.
They might help British businesses.
They might be exactly the right thing in some places.
But they can also come with extra risk, extra cost, less access, more complexity.
So, my question is simple.
Who is carrying that?
Because with a workplace pension default, most people have not actively chosen it.
They probably haven’t picked the investments.
They might not know what private markets are.
But if it doesn’t work, they still carry the outcome.
And government intervention has never gone wrong before, has it?
HS2.
Water.
Trains.
All different.
Not the same thing.
But enough to make you ask the question before we all get too excited.
Good intentions do not remove risk. (Look at a typical ‘lifestyling fund’ and the impacts this had to real people during the bond crisis of 2022. (ii))
They just move it. And sometimes they move it onto people who never really knew they were taking it.
That’s the bit I struggle with.
Not investing in Britain. Not private markets. Not trying to do something useful with pension money.
I actually like some of that, and if you read my UK PLC blog, you will see, I do agree in backing Britain.
But I don’t like the idea that a policy target can quietly become an investment decision for millions of people who haven’t really had the conversation.
If it is better for savers, brilliant.
Show the evidence.
Show the cost.
Show what happens if it does not work.
Because “long term” does not mean “anything goes”.
And “default” does not mean “designed for you”.
So yes, this thought started from getting the bus into Leicester and walking past City Hall.
Which may seem ridiculous.
But, when we stop looking at real people, living their real lives, in real cities, that’s when we come up with a blanket – this will work for everyone approach.
If you have a workplace pension and you don’t really know where it is invested, or what risk you are taking, maybe that’s something you should start to consider sooner rather than later.
Not in a panic. But it is your money.
And I think people should understand what is being done with their money before the government get too excited about where it’s being invested.
After all, anything beyond your fair share of tax, isn’t theirs to get excited about!
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