Wednesday, 20 Nov 2024

Boris bounce to boost pension savings for millions as Britain set for stock market boom

Around £3.8billion has been ploughed into stocks funds after the Prime Minister’s landslide win – the biggest influx of cash for more than four years. Experts welcomed the surge in confidence as a huge help for savers and small investors and raised the prospect of “large increases in the value of pension savings across the board in the coming months and years”. Former pensions minister Baroness Altmann said: “This is great news for pensions. The result of the election has been a breath of fresh air for the market, encouraging people to invest in UK stocks. 

“Most popular schemes are invested, at least in part, in UK stocks and shares. 

“The Government has got millions more people saving through the workplace pensions and they will potentially be better off in retirement because of the boost. 

“People were reluctant to invest in case there was a left-wing Government that would confiscate shares and not give value back to shareholders. 

“The scale of the victory was so emphatic and the rejection [of Jeremy Corbyn] was what investors domestically and overseas needed to start buying UK stock. 

“There is now certainty that things won’t be disrupted by a No-Deal Brexit and for the next five years we won’t face a Marxist, anti-market Government.” 

Investors had shunned London’s stock market amid fears a Corbyn regime would have confiscated £300billion of shares in 7,000 large companies had he won the December poll. 

Under a Labour Government’s “inclusive ownership funds”, every business with more than 250 staff would hand 10 per cent of shares to workers over a decade. 

Experts said Mr Johnson’s triumph lifted much of the uncertainty plaguing businesses and has also given overseas investors more confidence in the UK. 

Large inflows of money into stocks are a signal of rising investor confidence. Domestic shares are thought to be 20 per cent cheaper than similar assets abroad. Investors turned from London as political paralysis over Brexit saw “endless debates” about our future relationship with the EU. 

The Prime Minister’s Withdrawal Agreement passed through the House of Commons with a majority of 124. 

Shortly afterwards the pound was up 0.6 percent against the Euro and 0.2 percent against the US dollar. 

Former Pensions Minister Sir Steve Webb, who works at Royal London, said of the stock market boom: “It is clearly good news. 

“It is good for employers who have a company pension scheme which has invested in the UK. That balance has gone up. It will also ease pressure on employers. 

“Younger workers are likely to invest for the long-term, so this could be particularly good for them.” 

Goldman Sachs analyst Sharon Bell said the strong performance of domestic stocks will “continue as the UK delivers better growth”. 

Experts also urged investors to cash in on a £100billion programme for the North. 

Malcolm McLean, of actuaries Barnett Waddingham, believes the election result and increasing stock investments raise “the possibility of large increases in the value of pension savings”. 

He said a stable government ends the “paralysis that has afflicted Parliament with the endless debates about Brexit”. 

He added: “People can feel more confident about putting their hard-earned savings into pensions and other investments.” 

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