Irregular Roundup, 22nd June 2026

We begin today’s Irregular Roundup with pensions.

Uncomfortable retirements

FT Adviser reported on the latest Pensions UK report on Retirement Living Standards.

• Only 9% of the UK’s working age population is on track for a “comfortable” retirement (£45K pa for a single person and £63K for a couple – it doesn’t sound that comfortable to me).

In 2023/24, 23% of pensioners couldn’t even manage the minimum retirement standard (now £14K for one person and £23K for a couple).

• 82% of workers are now on track for this level (presumably because of auto-enrolment in recent years).

The moderate levels are now £33K for a single person and £45K for a couple.

• 23% are on track to hit these.

It’s worth noting that Retirement Living Standards assume retirees own their own home (so housing costs like mortgage payments and rent are excluded, as are social care costs).

• In London, renting privately would increase the minimum levels to £32K for a single person and £43K for a couple.

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It’s the same old story on pensions – people don’t save enough and don’t start early enough.

• And most people have no idea of the capital sum they will need to put together in order to draw the income they need for daily living.

Nor are people great at working out the impact of inflation on their savings and their future costs.

Auto-enrolment should be mandatory, and minimum contribution levels should be closer to 15% than the current 8%.

Who can we tax?

The most interesting thing to come out of the latest batch of Mandelson messages (can anyone explain why the documents are released in stages, other than to distract from larger governmental failings?) was the verdict of Pat McFadden, the work and pensions secretary, on Labour MPs. He told Mandelson :

Every meeting I have is: “who can we tax in order to pay benefits to others”?

Not really the growth mindset the government has been claiming to have, though pretty consistent with what’s happened since they came to power. 

• Tax and spend is the only thing they know.

Last year, 130 MPs helped to undermine Starmer’s welfare reform bill, and 49 still voted against it even after the savings were cut from a miserable £5 bn to a pathetic £2 bn.

Kemi Badenoch tweeted:

It doesn’t matter who is in charge of these people, the party for Benefits Street will tax us all into poverty to pay for more welfare.

Don’t expect any better from Andy Burnham. 

• As Blair pointed out, the reaction of Labour to voters moving right is almost always to move further left.

NEETs

Alan Milburn’s review of worklessness predicted that we will have 1.25M young people not in education, employment or training within five years.

• That would make 1 in 6 of the youth NEETs.

Three in five NEETs have never had a job, up from two in five 20 years ago.

• 15% have been to university, and 30% have five “good” GCSEs.

On the other hand, we now give handouts to people who claim they are anxious about something.

• And the minimum wage, enhanced employment rights and higher NICs mean that many young people won’t seem very attractive to employers.

Another can for Andy to kick down the road.

Risk Taking

On his Opportunity Lost substack, Ben Ramanaukas looked at the (lack of) risk-taking in the UK.

He started with the popularity of Premium Bonds (the head of NS&I had just been scaled) and moved via loss aversion and the low levels of investment (and therefore the lack of productivity increases) in the UK since the 2008 financial crisis, to the factors behind this.

• CGT, corporation tax, and dividend taxes are disincentives to risk-taking
• Over-regulation and political fear-mongering
• Speculation in the run-up to fiscal events
• Red tape in the planning system
• The minimum wage and increases to employers’ NIC and to employment rights
• An education system that prioritises academic achievement (often in subjects with little real-world application) over trades and entrepreneurship
• Elitist attitudes to business 
• The welfare system

Growth and Wealth

CapX reported on UK attitudes to growth and wealth:

When asked whether the UK should focus more on growth, an overwhelming 87% agree, compared to just 9% who say the country is already wealthy enough. 

This view cuts across the usual political divides, with strong support across genders, age groups, educational levels and regions. This is a real slap in the face for the degrowthers.

At the same time, there’s not a great understanding of what would drive more growth, and how that growth might be shared out.

There’s also a poor grasp of how far behind Britain already is:

A majority of Brits wrongly believe that the average person in the UK is as rich, or richer, than those in Switzerland, the United States, Singapore, Germany, Australia and much of Western Europe. In reality, the average Briton is significantly poorer than the average person in all of these countries. 

The UK’s GDP per capita of around $57,000 places it well behind Switzerland ($118,000), Singapore ($99,000), the United States ($93,000), Australia ($69,000) and Germany ($64,000). The UK ranks 21st globally, behind not just these major economies, but also the Netherlands, Denmark, Sweden, Austria and Belgium.

We’re also behind all 50 states in the US, with Mississippi the poorest. 

• On average, Brits think we are as rich as the 7th-richest state, not the 51st.

Active vs Passive

On his substack, Larry Swedroe argued that the distinction between active and passive funds is broken.

Every year, S&P Global publishes its SPIVA scorecard — the industry’s most-cited benchmark for how “active” funds perform against “passive” ones. The methodology is straightforward: index funds are passive; everything else is active.

Larry thinks it’s unfair that systematic yet diversified factor funds are seen as just as active as discretionary hedge funds with concentrated portfolios. 

Active management is an attempt to identify which securities will outperform and when to be in or out of the market. It is the exercise of human judgment in deciding which stocks to hold, and when to hold them.

I can see his point. There’s some value in distinguishing between human and systematic investing, but as he points out, even the passive indices involve some discretion:

The S&P 500 index is administered by a committee at S&P Global that meets regularly and votes on which companies to include or exclude. Inclusion is not mechanical. There are criteria — profitability, liquidity, domicile, float — but within those criteria, human beings make judgment calls.

This is a topical issue, with the recent IPO of SpaceX, plus Anthropic and OpenAI to come: 

• Should they be included in the indices?

I’d rather they weren’t, and it looks as though I will get my wish.

• IPOs tend to occur at favourable times for the people selling the shares, and most new issues crash within the first couple of years.

It probably makes more sense to phase them into the major indices gradually.

Burnham

Andy Burnham won the Makerfield by-election more easily than expected.

• Restore took votes from Reform, but it wouldn’t have mattered anyway.

Starmer has resigned, so Burnham’s path to No 10 looks clear.

But the public borrowing numbers and the reaction from the bond market mean that he has little room to manoeuvre.

• To win over the back-benchers that he needs to become leader, he will have to pledge not to cut spending (and welfare spending in particular).

Which suggests more taxes – but which ones?

• I think the odds of an early general election have significantly increased.

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That’s it for today.

• Until next time.