To think that UK pensions and UK isas should be invested in UK based companies

[Noras]

On Radio 4 Today

Hundreds of companies are being brought and then revenue goes off shore. The impact is devastating as the UK Gove loses the tax take which means that the burden of tax falls on fewer shoulders.

This week we could be losing Lounges, Direct Line to oversea investors. I have no idea where there will remit taxes.

Our high street is increasingly populated with companies who don’t remit in the UK so your hard earned pound is sent overseas to benefit others.

We need to invest in companies listed in the UK or continue with exorbitant tax rises on individuals eg direct tax, council tax etc.

We need to invest in UK based companies both with our individual spending but also with our pension investments.

No

Pensions are invested in (usually) global funds to diversify and reduce risk.

Pensions and S&S ISAs should be invested in a suitably diverse portfolio of assets to fit the chosen investment objectives/risk profile. Some of that will include some UK shares, but not by any means all.

UK companies are being sold because that's how the country is financing the trade deficit. Britain imports much more than it exports and that money has to come from somewhere. Selling British assets, like companies, housing and farmland, are ways that the money to finance those imports are paid for.

So I'm afraid your idea wouldn't make much difference.

And hopefully make some profit.

Taxes are paid in the country where profits arise. The listing/location of the owners makes no difference. Did they imply what you are suggesting on R4? I'd be surprised as it is financially illiterate.

Absolutely not. Being able to invest in a diversified portfolio is most people’s only way of ensuring a more comfortable retirement. Unless you work for the government, and have a guaranteed pension anyway..

Eh? British assets are being sold as returns on them are greater than the cost of the capital to buy them. And Boards have a fiduciary responsibility to shareholders to maximise their returns ie. accept bids that appropriately value a company.

Profits earned in the U.K. can be taxed in the U.K. it just depends on the way the U.K. tax rules are written.

Rachel Reeves did talk about changing some pension rules to allow more public sector and union pensions to join together to become bigger investing forces to allow them greater choice in investing.

Both explanations are right. Mine is macroeconomic and yours is microeconomic.

The flow of money out of the country has to be balanced (eventually). Obviously the individuals at Acme Corp (GB) aren't making the decision to sell to foreign investors for that reason, but it's still the underlying reason that it's happening.

Britain's is living beyond its means and selling assets to finance it.

There are plenty of popular UK fund isa's. People just choose to invest in other things too. Are you saying that uk citizens should be banned from investing in anything other than UK stocks? What about selling French cheese in supermarkets? Japanese cars? Holidays abroad? It's a very insular view you have there.

It's a no from me.

The man reason people are not investing in the UK is that the FTSE 100 has flatlined post Brexit. Compare the 5 year graph for the US SP500 index with the 5 year graph for the FTSE.

Thank you! I knew I should have studied economics at university. More people should tbh....

Is this the topic this week in the Creep Towards Nationalism Playbook?

To be fair, a five year window isn’t particularly helpful from a long term perspective. There are long periods when the US markets have significantly underperformed global markets, though not withstanding that investing purely in the UK is stupid. But on a volatility basis the S&P500 a lead to some very sub optimal results, depending on when you retire in the cycle.

The following clip is quite long, but I think essential for those considering where to invest when planning for and in retirement.

Um no. I want my pension to grow and not be exposed to the risk of having all eggs in a UK basket.

If you want to support UK businesses then stop buying from Amazon and the Chinese shite sites like Shein or T**u. Lots of small retailers and traders around, they may cost a wee bit more but that just means you buy less shite and plastic tat in the first place.

Not if you want a decent pension fund and retirement. What the Govt should be doing is making the UK a good prospect for inward investment, that's how you secure long term growth and prosperity. It's not the message they are giving off, especially with their pandering to the unions.

Even the majority of its citizens don't invest in the UK, how much stuff that you buy is made in Britain? If you go to France for example, practically everything you buy is stamped with a French flag and either grown or made in France. Their flag flies from Govt buildings. Schools etc. Citizens are encouraged to buy home grown/manufactured produce. Many other countries do this too. Here, nope, you struggle to find stuff that isn't imported.

And the calls to force investment into the UK are coming from the same financially illiterate people who gave us brexit in the first place. If you want people to invest in your country then make it attractive to do so. We've done the exact opposite of that since 2016.

The argument made in the R4 article was that UK Govt gives a tax break to ISA holders, who then invest them off shore.

Bonkers when you think about it.

As is the unlimited nature of ISA holdings, they were originally designed for the small saver to have a tax break but are now used as a vehicle for the wealthy to avoid tax on v large investments.
I would suggest 100k in ISA's after that, they lose their tax free status.

Pensions should have a min of 10% invested in the UK, again, we give significant tax relief on these, why shouldn't the UK get something back?

No, pensions should maximise returns and the current UK regime is not business friendly.

Years of strikes and opposing the Unions, didn't work well for the Tories on inward investment did it? the never ending series of strikes cost the country billions. in lost productivity.

The pay rises given to Military, Teachers and NHS were pay rises recommended through an independent process, a process designed by the Tories but who never allowed any funds for them.

these rises will also help with retention and recruitment.

No I don't think they should be invested in UK only , we aren't likely to see any growth at all . Mine are global funds and I won't be changing .

YABU.

Pension schemes have a duty to invest in members' best interests. This means global diversification and seeking the best risk adjusted returns. UK companies haven't done as well as overseas and everyday savers' money should not be used to fulfil the objectives of the government of the day.

Ill-informed politicians should keep their mitts off the money many of us are relying on for an income in retirement.

@louddumpernoise I'm not saying it was a bad thing, it's just the timing didn't make for good optics. The UK hasn't been an attractive investment proposition for years, irrespective of who is in charge.