John Stepek

I think the big risk is that if interest rates stay where they are or even go up a bit because of the energy crisis...

that we're probably facing, then that will knock a lot of that on its head, particularly things like the housing market and the wealth effect from that.

Well, yeah, and you see all these news stories in the papers at the moment about people saying, oh, I can't sell my, you know, XYZ house for this price.

And obviously the solution is, well, cut the price.

But the problem is people have spent so long.

Yeah, but people have spent so long thinking that their house is worth X. And the other thing is when you look at the prices from when they bought them, and this goes back to what we talked about the other day, they haven't actually made any money in real terms even.

No.

if they get to sell them for the prices that they can't sell them for.

So I think people are waking up to what is actually quite a big hole in their household psychological balance sheet.

Yeah, thankfully so.

Basically, so we know the Mansion House Accord was like a voluntary agreement with 17 of the biggest pension providers in the UK to stick 10% of DC pensions into private assets and 5% of those had to be in the UK.

Now, okay, let's park whether that's a stupid, well, it is a stupid idea, but let's park that.

So the government in the pensions bill, rather than saying, okay, well, these guys have agreed to do this, that's fine.

They stuck in this clause, which basically says that if they don't do it, we can force them to do it.

And not only can we force them to do what they've said they'd do in the mansion house agreement, we can force that it's completely uncapped.

We can tell them to invest in anything at all.

The House of Lords thankfully kicked that back and said no chance that's not happening.

The government came back and said well okay we will just be able to mandate basically to the limits of what the Mansion House thing says so 10% in private assets and last night the House of Lords voted against that again and pinged it back to them.

And so now, basically, unless the government kind of backs down on this, chances are reasonable that actually the whole pensions bill will collapse, or rather it won't get through in this parliamentary session.

And the thing is, the pensions industry is not especially happy about that because they actually like a lot of the other changes, which you can't go through here.