Pension reform impact on markets?

Wobblydeb

I haven't seen any of the press that I read make any comment on the likely impact of the pension reforms on the FTSE.

Does anyone have a view on this - or links to any good articles?

My gut feeling is that there will be an outflow of money this summer as people withdraw cash from their pensions and that will cause the FTSE to fall ..... but I have not seen any financial journalists suggest this?? Am I missing some obvious point?

jimjames

I think the numbers are unlikely to have any impact on the markets compared to the overall totals. Most sensible investors would stay invested rather than drawing out into cash where you have virtually zero return anyway.

You're also assuming that people are invested exclusively in the FTSE, that isn't likely to be the case for anyone who has a balanced portfolio.

dunstonh

My gut feeling is that there will be an outflow of money this summer as people withdraw cash from their pensions and that will cause the FTSE to fall

You forget the massive inflows that go in as well as those that enter drawdown that would normally have bought an annuity.

TakeCareOfThePennies_2

Wobblydeb wrote: »

I haven't seen any of the press that I read make any comment on the likely impact of the pension reforms on the FTSE.

That's because if you did read something of the sort in the press, it would be utter nonsense.

Your understandings of the workings of today's markets are distinctly lacking. Not your fault. Just remember, its a global market out there, and the FTSE is a major player. Retail investors such as people managing their own SIPPs are right at the bottom of a very large pile of a whole array of institutional traders ranging from algorithmic hedge funds to corporate pension fund managers.

The impact on the FTSE from pension reforms in the UK or any other country is thus likely to be absolutley zero. Its just another minor news item, and just noise if your desk is located outside the UK.

And anyway Wobblydeb, you're a bit late to the game. If the pension reforms were to have an impact on the FTSE they would have already. Things are priced into the market by institutional traders as they are announced, so remind me, when were the pension reforms first announced ? So the only possible effect on the market from now on would be from retail traders selling small odd lots. The institutions will have played their cards by now, its old news for them.