British pension savers are set to benefit from Donald Trump’s election victory, as the former US president’s pro-business stance boosts stock markets, especially in the US.
Andrew Evans, CEO of Smart Pension Group, a leading UK pensions company, highlighted the positive impact of US emerging markets on UK pensions through investments in US assets.
“US markets have been incredibly bullish since Trump won, benefitting UK pension savers from money linked to US assets, whether they realize it or not,” Evans said.
Smart Pension, which manages the retirement savings of about 1.4 million people, invests 52% of its main fund in the United States. After Trump’s election, the S&P 500 index rose 5% to a record high of 6,001.35 points. Although it has since fallen slightly to 5,863.69 points, the index is still 2.6% higher than its pre-election level and 12.8% higher since August. Likewise, the Nasdaq Composite Index hit record highs and is still up 2.6% from November 4th.
Despite concerns about Trump’s trade policies, which some economists warn could disrupt global markets and fuel inflation, investors remain optimistic about his promises to cut corporate taxes and his pro-growth agenda. “Trump’s policies that boost US growth and corporate assets will benefit global pension funds,” Evans noted.
Rachel Reeves calls for reform of the UK pension system
Meanwhile, in the UK, Chancellor Rachel Reeves has proposed a comprehensive overhaul of workplace pensions, with the aim of consolidating smaller funds into “mega funds” worth £80bn. These larger funds are expected to have the ability to invest in a wider range of assets, driving growth and returns for savers.
Evans welcomed the initiative, which aligns with Smart Pension’s mission to transform retirement savings. The company currently allocates 6% of its main fund to private markets and plans to increase this investment.
However, Evans called for more government incentives to stimulate domestic growth, particularly in light of the £41.5 billion tax rises announced by the Chancellor of the Exchequer in the Budget. “Promoting growth while imposing significant tax rises is a difficult balance. Additional structural measures are needed to support investment in the UK,” he said.
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