Proposed Pension Changes by Jeremy Hunt to invest in UK Start Ups

FIREDreamer

I have only one word to say - Woodford!

Malthusian

MX5huggy said:

What was the basic “mistake” people made to end up victims of this scam? 

Trying to get money out of their pension before they were old enough. The pension money invested in Norton was from a "pension liberation" scam. If it hadn't been "invested" in Norton choppers it would have been disappeared some other way, as happened in every other pension liberation scheme.
The more relevant section to the subject of this thread, the pension grifter tax, is this: "Millions of pounds in government-backed loans and ministerial endorsements were given to Norton, which enhanced the credibility of the firm and its owner." This is the kind of "startup" that the Government wants people to invest their pensions in. 

booneruk

GazzaBloom said:

"From my cold dead hands"

From what I understand it will be 5% of the pension houses default funds and It's not a good deal, the private equity fees will erode any benefits, start-ups are high risk and some money will be lost in ventures that don't pan out. A short sighted, ill conceived idiotic idea from this lame government.

I am not not in a default fund in my pension so he can jog on.

Just my opinion, of course.

As far as I understand it, Labour are touting similar ideas

https://www.pensions-expert.com/Investment/Labour-backs-50-billion-DC-incubator-growth-fund-concept?ct=true

Albermarle

For as long as I can remember the City has been accused of short termism, to the apparent detriment of supporting the UK economy/industry ( opinions may vary).
Whilst at the same time some other European countries, notably Germany, have been praised for the much bigger involvement their finance sectors have had in supporting their economies.
Maybe this is a kind of small step towards promoting a more 'patriotic' support from the City in support of the wider economy?

Cus

It's a quality idea, let's invest in growing UK companies rather than boring gilts. Of course it will be implemented badly and will rip off the underlying investor. Shame

GazzaBloom

PSea_Shell said:

What's a "default" fund, generally?.  As even employers could have "chosen" a fund for their scheme, would they not.

I have an old employer pension with Aviva that I haven't converted to a SIPP yet.

Not sure government should be meddling in this TBH.   It's all quite worrying.

"The Treasury confirmed it had struck an agreement with large pension fund managers, including Aviva, Scottish Widows and Legal & General, that will see 5% of assets in their default pension funds invest in private and high-growth companies."

I am with Aviva in my workplace pension and when the company transferred from Standard Life they moved everyone in the Aviva My Future Focus Growth Fund as the default. There is a handful of “default funds” 

Aviva call them Select Core Funds and they appear at the top of the list when you go to change your investments as below. I assume these are the funds that the government scheme will apply to.

I selected my own lower cost index funds immediately and moved my money out the same day

zagfles

booneruk said:

GazzaBloom said:

"From my cold dead hands"

From what I understand it will be 5% of the pension houses default funds and It's not a good deal, the private equity fees will erode any benefits, start-ups are high risk and some money will be lost in ventures that don't pan out. A short sighted, ill conceived idiotic idea from this lame government.

I am not not in a default fund in my pension so he can jog on.

Just my opinion, of course.

As far as I understand it, Labour are touting similar ideas

https://www.pensions-expert.com/Investment/Labour-backs-50-billion-DC-incubator-growth-fund-concept?ct=true

Quelle surprise. And don't expect them to stop at workplace pension default funds, even SIPPs may not be off the table.

zagfles

Albermarle said:

For as long as I can remember the City has been accused of short termism, to the apparent detriment of supporting the UK economy/industry ( opinions may vary).
Whilst at the same time some other European countries, notably Germany, have been praised for the much bigger involvement their finance sectors have had in supporting their economies.
Maybe this is a kind of small step towards promoting a more 'patriotic' support from the City in support of the wider economy?

Ah yes, use of passive verbs in the same way as biased journalists who want to imply a universally or widely held view without identifying who or how many people hold those views.

I was praised for backing the winner in the 3:30 at Kempton Park. Well, one person praised me, so the statement is true. Everyone else just said I was a lucky sod and I'll probably lose next time. But I don't need to say that, do I. I was praised, so I must be an investment genius, right?

Prism

DoublePolaroid said:

Amusingly the Government's own (presumably rose-tinted) modelling predicts that a typical punter paying the higher end of their assumption for fees will be worse off after 30 years if it's incorporated into a typical 60/40 split portfolio. They helpfully include figures for a 65/35 split that produces a 1% increase in pot size for the median case scenario.

It seems hard to imagine that very many savvy, rational and purely self-interested individuals would choose to do invest this way of their own accord.

I like to think I count as one of those investors and invest in private equity - mostly for the returns.

Bostonerimus1

I've never seen the sense of taking the risk and expense of investing in "start ups". Of course I'm not a hedge fund manager taking the fees or a wide boy, wide eyed optimist, entrepreneur looking for capital. I don't play the lottery or indulge in high stakes gambling either.