Labour urged to stop bullying over pensions
The boss of one of Britain's biggest stocks and shares platforms has accused Labour of trying to 'bully and cajole' pension funds over where to invest retirement savings.
AJ Bell chief executive Michael Summersgill yesterday voiced concerns that Rachel Reeves could instruct pension providers to back unlisted UK equities.
Retirement saving funds last week caved in to pressure from the Chancellor to boost their investment in private British businesses and infrastructure projects. Aviva, Legal and General and Phoenix Group were among the 17 firms that vowed to invest 10 per cent of workplace pensions in unlisted assets by 2030 – with 5 per cent of that allocated to the UK.
Fears are mounting that Reeves will force pension funds to make the shift if investment continues to lag. Earlier this month the Chancellor said she was 'never going to say never' to such a move. But Summersgill labelled the tactic among ministers to 'bully and cajole' firms as 'crude'. 'It's not the right approach', he said.
AJ Bell is not a pension provider in the traditional sense as it does not control money on behalf of clients. But its customers can open a personal pension on the platform and choose their own investments.
Summersgill said he was against a mandate, claiming it is 'highly risky to start mandating what people should do with their money – it is very complicated'.
Meanwhile, shares in AJ Bell jumped 8.4 per cent, or 38.4p, to 495.6p, after it reported a rise in half-year sales and profits for the six months to March 31.
The Manchester-based company has also urged the Chancellor to rule out pension tax changes to avoid speculation ahead of the Budget in October and pressed Reeves to charge forward with Isa reform.
AJ Bell wants cash Isas and stocks and shares Isas to be combined into one product. Such a move would 'remove a current barrier which requires people to choose one or the other at the outset,' it said.
Reeves faced a backlash at the start of the year amid speculation that she was planning a tax raid on cash Isas, including a potential reduction of the £20,000 tax-free allowance.
AJ Bell said half-year profits rose 12 per cent to £68.8m and revenue was up 17 per cent to £153m.
It added 51,000 new customers, taking its total to 593,000 – a 9 per cent increase. Assets under management hit a record £90.4billion after growing 5 per cent.
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