2020 Newsletter October

Autumn News 2020

I occasionally ask myself am I on the right path?
An intellectual exercise that can challenge me. 

It is now 15 years and I have kept on this path of promoting better ways to invest.

In 2009 I did a BBC radio interview when the journalist believed that it was not possible to challenge your bank or advisers to explain the content of their funds.

Well, here we are in 2020 and there is an obligation on trustees of pension funds to consider stewardship* during their annual meetings. Investment fund managers are increasingly required by the regulators to be transparent with their dealings. 

Many fellow financial advisers, whether independent like me, or part of a larger organisation, have claimed that “it’s a fad, a passing fashion, saying I am too focused on issues that they do not understand.  In effect, “this woman is, at best, a fringe player. 

Here is why I am convinced that the path I chose is the right one.

COVID 19 has, seemingly made society look again at how we live, so has the even bigger challenge of climate change. 

*Increased focus on Environmental, Social and Governance (“ESG“) issues

Will 2020 be the year that ESG goes mainstream across the pensions industry?

Ethical investment options have been available for members of many defined contribution schemes for many years.

But, despite increased interest from trustees, members and even employers in ESG investment issues, there hasn’t been a material shift in investments for defined benefit [final salary] schemes.

The decision in Cowan v Scargill [1985] Ch 270 is one reason for inertia – the decision made clear that pension trustees have a duty to act in best financial interests of scheme beneficiaries.

Standing still may not, however, be in the best financial interests of scheme beneficiaries.

At the end of December 2019, the Governor of the Bank of England, Mark Carney, gave a key-note speech stating that companies and investors needed to take action now as, when the result of extreme weather events became obvious, “it will be too late to do anything about it”.

At the UKSIF [UK Sustainable Investment & Finance Association] AGM (on zoom) our guest speaker was The Rt Hon Kwasi Kwarteng MP, Minister of State for Business, Energy and Clean Growth, with a repeated message that his mission is to Build Better and Greener.  Which seems to put my position as anything but a fringe player.

The UK holds the Presidency for COP 26 and there is a determination that the UK will achieve its zero-carbon goal by 2050. 

UKSIF members are helping to drive that change. In investment terms, this means we can expect more tax incentives to decarbonise our towns and cities.

It is currently possible to use alternative energy funds in Business Relief schemes, EIS, ISAs, Pensions. I look forward to better and wider choices, as governments give tax incentives to projects that they want supported by private sector investors.

Once again that nagging self-doubt is put away.  We can do better but it is a journey not a destination yet. Imperfect but better than inaction.

Some other news


Increase in Minimum Pension age confirmed

“The government … proposes to increase the age at which an individual can take their private pension savings at the same rate as the increase in the State Pension age.

It is important people have the opportunity to plan properly for this change and so the government proposes to wait until 2028 (when the State Pension age will rise to 67) to fully implement this change.

From 2028, people will not be able to draw their private pension benefits without a tax penalty until age 57, whether or not this is the point at which they stop work.

From then on, the minimum pension age in the tax rules will rise in line with the State Pension age so that it is always ten years below.”

Child Trust Funds started to become accessible from September

Millions of teenagers are set to benefit for the first time from money in Child Trust Funds (CTFs) that has been waiting for them since they were young children.

If any of your family, children, or grandchildren, need advice I am more than happy to provide them with impartial and free advice so that they make the best of the opportunities to carry on building their next egg. 

Possibly they plan to continue in education, save for a home, buy their first car or backpack around the world.  Whatever their intentions they could benefit from someone explaining how to continue saving and I would be delighted to provide that information.

Please feel free to pass on my newsletter to anyone you feel my find it interesting.