Latest news with #L&G
Daily Mail
5 days ago
- Business
- Daily Mail
Time is money when it comes to pensions, says L&G boss António Simões
Albert Einstein may not have said it but, as Warren Buffett has often repeated and proven, compounding interest is the eighth wonder of the world. It's why it's so important that pensions reform has been plucked from the too difficult box and placed firmly on the agenda. To get Britain growing, we need to rewire the financial system to boost investment while making people's hard-earned savings work harder. 'Patient' pensions capital is central to this ambition - increasingly well understood as a national economic lever that can catalyse growth, deepen capital markets, and support financial stability. Australia's £2trillion pension pool has helped power domestic investment, and shield its economy from global shocks. But when it comes to building our personal pension pots, patience is a misnomer. The challenge of pensions adequacy – making sure all of us have enough to live on in later life - is urgent and pressing. Adequacy depends on three things: 1. when people start saving; 2. how much is being put into the pot, and 3. what returns they get. We have heard a lot about the last one and, at L&G, our Private Markets Access Fund is helping more people access the potential high returns available through investments in private markets. In addition, our default Lifetime Advantage Fund already has up to 15 per cent invested in these assets. But the other two are critical. Starting early makes all the difference and whilst time is a simple, potent lever, it is often the most neglected. Under the current system, the average person would be 15 per cent better off when they retire if they started saving at 18 instead of 22. The problem is that advice to save early rarely lands. It's hard to imagine yourself as a retiree when you're only just starting out in working life. But if you create the habit - it sticks. This is where Government can help by lowering the auto-enrolment age from 22 to 18. The powers already exist and countries like Australia and Canada have shown it's possible. How much goes into your pot is also crucial. Automatic enrolment brought millions into the system, but minimum contribution levels are still set too low and need to be gradually increased. The second phase of the Government's pensions review is the right moment to act on these two areas. It would be a win-win. Those at retirement would be in a stronger financial position, less reliant on the state. And when more people save, more capital is available for the UK economy, supporting jobs, infrastructure, and national resilience. Bigger pension pots could be channelled into productive investment, helping to fund growth and regeneration. And retirees would have more to spend. This matters, given that consumer spending drives 60 to 63 per cent of UK GDP and retirees already account for a quarter of that total. The best financial gift we can give young people is time. A pension opened at 18 may not seem much now, but in 30 or 40 years, it could mean everything. So, let's stop wasting time. Let's start saving it.
Yahoo
03-07-2025
- Business
- Yahoo
Investors can't trust Labour, warns UK bond giant
Investors can no longer trust Labour after its multiple about-turns, bond giant Legal & General (L&G) has warned. Sonja Laud, the chief investment officer at L&G, said the decision to abandon key benefit reforms and reverse course on winter fuel payments had destroyed faith in the Government's economic plans. L&G is one of Britain's biggest investors, managing £1.1 trillion of assets. It is one of the biggest buyers of UK government debt. Ms Laud said: '[Markets] can't trust that what's been put forward will be put in place. You will see the adverse reaction. It was quite a big one yesterday.' It follows a dramatic day in which Rachel Reeves's tears in the House of Commons triggered a fall in the pound and a jump in borrowing costs. Investors were concerned that the Chancellor could be on the brink of leaving Downing Street, sparking fears that her fiscal rules could be abandoned. However, borrowing costs had been rising even before the Chancellor wept after Sir Keir Starmer gutted his welfare reforms on Tuesday night to avoid an embarrassing defeat on the legislation. The about-turn has blown a £5bn hole in Ms Reeves's budget. Ms Laud said: 'The changes we have seen ever since the first announcements from the Labour Party - and the intended changes they wanted to put forward - have subsequently been either watered down or changed. 'That's what the bond market does not like. The reaction in the gilt market yesterday [shows] that there clearly is an unwillingness to accept that lack of clarity.' She added that traders were still nervous after Liz Truss's mini-Budget. She said: 'There's heightened sensitivity in the UK because of what happened in 2022, where you had unfunded fiscal promises.' Ms Laud's comments come as Sir Keir and Ms Reeves scramble to repair the damage done this week. The Chancellor made a surprise appearance alongside the Prime Minister at an event on Thursday, at which she insisted she remained committed to her fiscal rules. The Prime Minister also said Ms Reeves would remain Chancellor 'for many years to come'. Borrowing costs dipped in response but remain higher than where they were just days ago. David Roberts, at Nedgroup Investments, said the bond market turmoil was a 'flashback to the days of Liz Truss'. 'Having been elected on a mandate to sort out public finances, to rein in benefit spending, it appears many in the [Labour] party have decided to return to their traditional tax and spend ideology,' he said. 'Failure to push through welfare reform whilst adhering to fiscal rules seems to leave the Government with little option other than to raise taxes.' Morgan Stanley warned that the struggling Chancellor could be as much as £30bn in the red against her fiscal rules ahead of the autumn Budget. With limited room to borrow or cut spending, 'tax hikes look most likely,' the bank said. Sir Keir's failure to grasp the nettle of welfare reform means Britain will spend £1.5bn a week on health and disability benefits for working-age adults by the end of the decade. The bill is on course to balloon to £75.7bn by 2029-30, up by one quarter from £60.4bn this year. It puts the cost of this portion of the welfare state on a par with the defence budget. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Spectator
01-06-2025
- Business
- Spectator
Why is your pension fund so obsessed with net zero?
Legal & General is Britain's largest asset manager, with over £1 trillion on its books. Every pound it manages should be dedicated to achieving the highest possible returns. This matters a lot: L&G manages over five million pensions in the UK. But in recent years, the asset manager has been particularly concerned with fashionable causes, instead of being entirely focused on making sure your retirement is secure. That is why I recently attended their AGM. I wanted to learn why the board is wedded to net zero, despite their fiduciary duty to clients, and whether they would consider reprioritising saver returns instead. At the Q&A I highlighted that US competitors have dropped their net zero ambitions. Most have pulled out of the 'Net Zero Asset Owner Alliance' – a UN-led consortium of asset managers 'committed to decarbonising their investment portfolios and achieving net-zero emissions by 2050.' L&G – along with most other British pension fund managers – is still a part of this alliance. But their commitment to decarbonising their portfolios and advocating for 'public policies, for a low-carbon transition' are premised on a net zero consensus that no longer exists. At the moment, roughly half of the public support either Reform or the Conservatives. Both parties oppose net zero by 2050. It is therefore reasonable to assume, as I told the board, that many with L&G pensions, do not want their retirement outcomes subordinated to the green agenda. In response, the board told me that its clients want to align with net zero by 2050. Whilst the board acknowledged that complex trade-offs exist, they did not explain what these were. Instead they doubled down, reaffirming their net zero commitment, before asserting that decarbonisation offers stellar investment opportunities. The problem is that these opportunities rely on government subsidy.
Business Mayor
20-05-2025
- Business
- Business Mayor
Legal & General acquires real estate investor in private assets push
Unlock the Editor's Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Legal & General, the British finance company that is one of Europe's largest asset managers, has acquired a real estate investor as part of a strategic push into private markets under chief executive António Simões. L&G, which manages £1.1tn in assets, has taken a 75 per cent stake in Proprium Capital Partners, a $3.5bn global real estate private equity group, the companies have confirmed. Under the terms of the deal, which is subject to regulatory approval, L&G will eventually acquire 100 per cent of Proprium. The value of the deal was not disclosed. The move is part of a broad strategic expansion by L&G into private markets following a restructuring of the FTSE 100 financial services business by Simões, who took on the top job last year. It comes after L&G poached Eric Adler from US insurer Prudential to lead its asset management division, after combining the unit with its private markets business. The deal marks the first acquisition under Adler, who is focused on growing L&G's asset manager and expanding into private markets globally. The UK-based financial services group wants to boost its private markets assets from about £50bn to £85bn and is targeting £500mn to £600mn in operating profits by 2028. L&G's latest acquisition underscores how traditional asset managers are seeking to expand into private markets in search of higher returns. Some of the world's largest asset managers — including BlackRock, Franklin Templeton and Capital Group — are expanding into private markets through acquisitions and partnerships with specialist providers. Private asset funds come with the potential to earn higher fees than for public market products, but expose clients to new risks. L&G will provide up to $300mn to support Proprium's funds as part of the deal. Proprium was spun out of Morgan Stanley's real estate special situations team in 2013. Its investments include Germany's A&O Hostels and pub group Admiral Taverns in the UK. About 60 per cent of Proprium's investments are in Europe, and the group also has a presence in Asia-Pacific. L&G says both regions are growth areas. L&G's real estate assets amount to about £22bn and include large-scale regeneration projects, industrial property and affordable housing. L&G also acquired an equity stake last year in US-based real estate investor Taurus, as it seeks to broaden its real estate business beyond the UK, where the bulk of its assets are focused. Adler said the deal would expand L&G's geographical presence and help to broaden its investment offering. Tim Morris and Philipp Westermann, co-managing partners of Proprium, said there was 'immense opportunity' in expanding into global real estate. The deal is set to close at the end of the year. As part of the agreement, Proprium's management team will continue to operate independently and will keep its current leadership structure, teams and investment process.
Times
10-05-2025
- Business
- Times
Pension funds could be forced to invest in UK projects
The government is set to give itself the power to mandate pension funds to invest cash in UK projects if they fail to comply with a voluntary pact due to be announced this week. A review, led by pensions minister Torsten Bell, is expected to recommend that the government is given the option to mandate pension fund investment, according to a source close to the government. The review will be published later this month after an agreement this week by more than 15 major pension fund investors — thought to include FTSE 100 giants L&G, Aviva, Phoenix and M&G — to invest up to 10 per cent of their assets in fast-growing companies and infrastructure, with half of that designated for the UK, by 2030.
