LABOUR’S plan to force pension funds to invest in a £50billion growth pot is “almost impossible to imagine going right”, an industry boss has said.
PensionBee CEO Romi Savova said it looked like the party wants to “tap” money intended for retirement to support the economy.
Shadow Chancellor Rachel Reeves this week added Labour’s support to a proposal by Nicholas Lyons, Lord Mayor of the City of London, to address a lack of investment in domestic growth.
He wants a £50billion pot funded by five per cent of all defined contribution pension schemes.
But Ms Savova told The Sun: “It looks like a Labour government is set on tapping our pensions — the money we will rely on to retire — to support the UK economy.
“What works in theory doesn’t always work in practice. With this particular Labour plan, there are so many reasons it could go wrong it is almost impossible to imagine it going right.
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“While there is certainly a case to be made for investing more in the British economy, growing our companies and providing rewarding work, using pensions as our national piggy bank could leave savers worse off.”
The UK’s reputation as a financial hub has taken a hit, with a wave of firms eyeing a shift to the US where there is greater investor appetite from pension funds.
Ms Savova, who set up PensionBee in 2014, said encouraging backing for a growth fund was not guaranteed to generate higher returns for savers.
She added: “When it comes to industrial development in the public interest, the UK has a strong record of delivering fat profits to consultants and contractors, and a less strong history of delivering great projects on time and on budget.”
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BORROWER AID DEMAND OF FCA
THE FINANCIAL CONDUCT AUTHORITY is considering making it a permanent requirement for lenders to support borrowers in difficulty.
The move comes after the FCA secured £47million in compensation from 17 firms for more than 195,000 customers.
During the pandemic, the body issued guidance to lenders on how to treat borrowers fairly.
This included the offer of reduced payments or payment holidays for customers if individual circumstances changed.
The FCA said that it had already sought “significant improvements” from around 100 lenders.
Pet shop top dog
PAMPERED pooches have helped PETS AT HOME to celebrate record sales of £1.4billion.
Boss Lyssa McGowan said that despite the cost of living crisis, the retailer was not seeing a drop-off in sales of novelty pet accessories or its VIP loyalty club for owners.
Instead, the retailer is ploughing £400million into a growth strategy to join up its retail, grooming and veterinary services online and open more than 40 stores.
Millions of Brits bought animals in lockdowns, leading to a so-called “pet baby boom”. However, the cost of keeping and feeding them has soared, with the price of dog food rising by 32 per cent compared to a year ago, according to official figures.
Ms McGowan said that she did “not recognise” that kind of inflation within her business and that Pets at Home’s own-brand range was 25 per cent cheaper than the competition.
BooHoo leaders' pay rise
BOOHOO’S boss and founders have had their pay doubled to more than £1million despite the online fashion retailer sinking to a £91million loss.
The Pretty Little Thing, Debenhams and Dorothy Perkins owner is giving them a bonus equivalent to 100 per cent of their pay even though it missed sales and profit targets.
Founders Mahmud Kamani and Carol Kane have been given £1million while CEO John Lyttle gets £1.35million.
They are also eligible for a £55million bonus each if they can revive Boohoo’s growth. More than a third of investors rebelled against the proposal.
Boohoo was valued at up to £5billion in the online boom in lockdowns but shares have since crashed to £546million, with a string of profit warnings.
l STRUGGLING online retailer ASOS last night launched a £75million cash call and secured a £200million high- interest loan with BANTRY BAY to shore up its balance sheet.
No Royal pubs joy
The boss of Young’s said the Coronation was a damp squib for pubs because people toasted the King at home.
Simon Dodd told The Sun: “It didn’t help that it was the wettest, coldest day in May.”
The chain, which has 277 pubs, grew sales by a fifth to £368.9million last year although profits dipped by 14 per cent to £36.2million.
Young’s has raised the price of a pint by 3.4 per cent, which Dodd claims is lower than the rest of the industry.
SHARES
BARCLAYS: down 1.68 to 156.98p
BP: down 11.55 to 474.95p
CENTRICA: up 2.65 to 116.25p
HSBC: up 6.20 to 606.40p
LLOYDS: down 0.94 to 45.83p
M&S: down 3.45 to 181.30p
NATWEST: up 0.20 to 268.30p
ROYAL MAIL: down 0.10 to 196.85p
SAINSBURY’S: down 3.80 to 275.10p
SHELL: down 52 to 2,340.50p
TESCO: down 0.70 to 265p
Boss flying off
THE founder of Starling Bank is stepping down almost a decade after starting the digital lender.
Anne Boden said it was “the right time” to step aside as chief executive as revenues doubled to £216million and profits grew sixfold to £195million. She said it was “not really appropriate” to stay in the role while she remained a shareholder and risked a conflict of interest.
She owns 4.9 per cent of the company and will remain on Starling’s board as a non-executive director.
US DEFAULT RISK
THE United States has been put on notice that it could lose its AAA credit rating.
Rating agency FITCH warned of a possible downgrade as a political standoff in the US Congress risks default.
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Another, MOODY’S, blamed “brinkmanship over the debt ceiling”. A downgrade would make US government debt more expensive. Treasury Secretary Janet Yellen said this week the US was days away from running out of cash.
But Moody’s said it still expected a deal to be done before a default deadline.
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