You may be more exposed to the US than you think, does it matter?
I do not invest directly into any US-focused funds, either through my Isa or my pension. Despite that, about 10 per cent of the value of my pension was wiped off in a single day in April when Donald Trump announced plans to slap huge tariffs on goods imported to the US from almost every country on the planet. And the global tracker fund that accounts for about three quarters of my Isa dropped 20 per cent. Neither has yet fully recovered.
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Telegraph
42 minutes ago
- Telegraph
Reeves warned pension reforms are ‘nail in coffin' for struggling businesses
Rachel Reeves has been warned that reforms to private pensions will be a 'nail in the coffin' for struggling businesses. The Chancellor is expected to announce a new review of the private pension sector in her Mansion House speech this week, which could result in employers being forced to pay more towards the pensions of auto-enrolled workers. The Government is concerned about the long-term stability of the state pension, which the Office for Budget Responsibility warned on Wednesday would become far more expensive by 2030 because of the triple lock. Leading business groups told The Telegraph that requiring employers to pay more towards their workers' pensions would damage already-struggling firms, who endured a hike in National Insurance contributions under Ms Reeves' last Budget. Employees who are auto-enrolled in workplace pension schemes currently contribute five per cent of their salary, pre-tax, while employers pay three per cent. A review by the Department of Work and Pensions (DWP) could conclude that businesses should pay more to help their workers in old age. There has also been speculation that employers will be asked to pay National Insurance on the pension contributions they make, which would hike costs further. Craig Beaumont, the executive director of the Federation of Small Businesses, told The Telegraph the reforms would have a disastrous effect for firms already struggling to stay afloat. 'Many firms have already stopped hiring, and for the first time since the 2008 crash, those who will contract or close now outnumber those who will grow,' he said. 'The Government must look in every corner for growth measures, rather than hiking auto-enrolment contributions and potentially levying extra NICs on top of those. 'That would be a double whammy - a nail in the coffin for job creation, targeting small employers who are disproportionately those with roles around the current thresholds. He added: 'We won't get growth or jobs if we get stuck in a cycle of constantly coming back with a new wave of employment costs, at the same time as the Employment legislation heaps risk and so deters new jobs.' His call was echoed by Kate Nicholls, the chairman of UK Hospitality, which represents 100,000 pubs, restaurants and hotels. 'In the ongoing cost of living and cost of doing business crisis, if costs increase further hospitality businesses will have to make some very tough decisions and this will include curbing operating hours, cutting headcount and keeping a lid on pay increases for managers and middle income earners,' she said. 'At the end of the day, something has to give - you can't squeeze a quart out of a pint pot.' UK Hospitality has previously warned that nearly 750 hospitality venues closed between October and December last year, an average of just over eight closures a day. Pubs and restaurants with casual workers are expected to be hit especially hard by the Government's employment rights reforms, which will make it more difficult to hire workers on zero-hours contracts. The pensions review will affect almost all full-time employees. While it could result in higher pension contributions for workers, bosses could decide to slash more generous schemes to cover costs, take on fewer workers or reduce wages. The DWP's pensions review will also look at the cost of the state pension, which is expected to be three times its forecast level by the end of the decade under the Government's triple lock policy. Sources at the department said it would look at life expectancy data and the impact of previous hikes in the state pension age. The triple lock is expected to cost more than £15bn a year by the end of the current parliament. The state pension age, which is currently 66, will increase to 67 between 2026 and 2028, and then 68 between 2044 and 2046, based on current legislation. However, this could be brought forward.
The Independent
44 minutes ago
- The Independent
What's hiding in your pension? How to find out where your money is invested and take control
SPONSORED BY TRADING 212 The Independent Money channel is brought to you by Trading 212. If you have a workplace pension, your money is most likely in a default fund: a ready-made mix of investments designed for the average saver. These funds aim for long-term growth by spreading risk across global markets, typically including equities (like shares in companies), bonds, property, and cash. On paper, it's a sensible, low-effort option. But dig deeper, and you may find your pension is funding sectors you'd rather avoid, such as fossil fuels, weapons, tobacco, and controversial mining firms. A recent government report reveals 90 per cent of employees stick with their default fund. That's not necessarily because it's the right fit, but because switching feels complex or isn't front-of-mind. Ben Faulkner, marketing director at ethical financial planners EQ Investors, told The Independent: 'A significant portion of employees are keen to invest responsibly and, while pension schemes typically have ethical options available, we know that most people stick with their default fund. This is a missed opportunity for aligning pensions with personal values.' Here's how to see where your pension sits - and how to take action if you don't like what you find. Which companies are in default pension funds? Default funds typically track mainstream indices like the FTSE 100 or MSCI World. An index is simply a collection of major companies used to represent market performance. While some default funds now screen out certain controversial sectors, this isn't standard and varies widely by provider - so it's up to you to check. Fossil fuels Fossil fuels are the biggest driver of climate change, responsible for around 75 per cent of global greenhouse gas emissions. But many default pensions still invest in oil and gas giants like BP, Shell, Chevron and ExxonMobil. Make My Money Matter estimated that UK pension schemes collectively hold around £88bn in fossil fuel investments - roughly £3,000 per pension holder. Public sector schemes are among the largest investors: Friends of the Earth found UK local government pensions hold more than £16bn in fossil fuel assets, including companies involved in new oil and gas exploration. Tobacco Major tobacco brands such as British American Tobacco, Philip Morris International and Imperial Brands are regularly included in default pension portfolios. Despite the World Health Organisation linking over eight million deaths a year to tobacco use, only a few UK pension providers have actively excluded tobacco from their default options. Defence and arms Some people see defence as essential, especially amid global conflicts, while others prefer not to profit from weapons. Default funds often include defence firms, and many don't screen out those linked to controversial weapons like cluster munitions or landmines. For example in March, Nest and The People's Pension announced they would exclude arms firms from their ethical funds - but not from their default ones. Mining Global giants like Glencore, BHP and Rio Tinto are common in default funds, despite criticism over environmental damage, community impact and governance. Some mining companies have wide-ranging geographical footprints, while some target specific locations or commodities. What about returns? Investing sustainably isn't just about ethics - it can also be financially smart. 'Studies show that companies with strong ESG (environmental, social and governance) practices tend to deliver better long-term returns,' Mr Faulkner said. 'These companies are often better equipped to avoid reputational damage, financial penalties, and regulatory breaches, all of which can undermine shareholder value.' Research from Morgan Stanley shows that ESG investments can match or even outperform traditional investments over the long term. How to check your pension's investments Log into your pension portal. Most providers offer dashboards or apps where you can check your fund. Look for the fund name and any factsheets or top holdings. If you're unsure how to log in, ask your HR team or pension provider. Read the fund factsheets. These outline investment strategies, asset allocation and key holdings. Some indicate whether they apply ethical screening or exclude certain sectors. Check independent rankings. Organisations like ShareAction, Ethical Consumer and Good With Money regularly publish reports rating pension funds on sustainability. These look at exclusions, transparency and action on issues like climate change and human rights. Consider switching funds. Most schemes let you move from the default to ESG or sustainable options, which may exclude certain sectors or prioritise companies with better environmental and social records. Mr Faulkner added a final reminder that it must be an employee decision to change. 'Concern about the environment and climate change in particular is increasing, but the onus is on employees to take action if they want to switch,' he said. When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
Reuters
an hour ago
- Reuters
Soaring Saudi exports and trade tensions will test oil price resilience
LONDON, July 14 - Oil markets have remained remarkably resilient so far this year, despite concerns over U.S. President Donald Trump's trade policies and rising OPEC+ production quotas. But that strength will now be tested, as Saudi output is starting to surge just as demand appears to be slowing. Benchmark oil prices are currently near $70 a barrel, down from a 2025 high of $82 in mid-January, but above the four-year low of $62 set in May. That followed Trump's "Liberation Day" tariffflip-flop, which sparked confusion about the policy direction and fears of a severe disruption to global economic activity and oil consumption. Investor jitters were compounded by a significant OPEC+ policy shift. Under the leadership of Saudi Arabia, the group including the Organization of the Petroleum Exporting Countries and Russia, started to aggressively ramp up production quotas in April for the first time in over three years. The group is set to add 2.5 million barrels per day of production between April and September. Given this backdrop, why has crude remained so resilient? It's likely in large part because most of these fears have yet to materialize. Crucially, Trump not only delayed his 'reciprocal tariffs', but he also held positive talks with Beijing, which managed to defuse some of the market's worst fears about trade tensions between the world's two biggest economies. To be sure, economic activity has slowed in recent months, but not nearly as badly as the initial drop in oil prices implied. Global GDP is forecast to slow to 2.3% in 2025, according to a recent World Bank report, opens new tab, nearly half a percentage point lower than expected at the start of the year. The OPEC+ supply hikes were also initially more talk than action. The decision by OPEC+ to unwind 2.2 million bpd of supply cuts, as well as to raise the United Arab Emirates baseline production by 300,000 bpd starting in April, initially had little impact on global supplies, mostly because several members had already been producing above their assigned quotas. While Saudi Arabia's production did rise significantly in June by 700,000 bpd to 9.8 million bpd, a large share of the increase was consumed domestically by its refineries as well as in power plants that use crude to generate electricity during summer's peak demand, limiting exports. Saudi "crude burn" is set to reach 695,000 bpd in July and is expected to remain elevated in August, according to consultancy Wood Mackenzie. The tide may be turning, however. As we move into the second half of the year, the negative trends that spooked investors in April now appear to be building. Trade tensions have come back to the fore in recent days after Trump outlined new tariffs for a number of countries, including allies and , along with a 50% tariff , and a 35% levy on many Canadian goods. Crude consumption already started to falter in recent months. While demand rose by a robust 1.1 million barrels per day in the first quarter of 2025, growth is set to halve in the second quarter, according to the International Energy Agency. Importantly, demand in countries that are heavily dependent on trade with the United States seems to have taken a hit. Demand in China dropped in the second quarter from a year earlier by 160,000 bpd, Japan's by 80,000 bpd, Mexico's by 40,000 bpd and South Korea's by 70,000 bpd. U.S. demand over the same period also contracted by 60,000 bpd, according to the IEA. These trends could accelerate if the trade wars kick in in earnest. Meanwhile, oil production is expected to start rising significantly in the coming months, particularly from Saudi Arabia, the world's top oil exporter, as it ramps up production and as its domestic crude burn eases as summer ebbs. Saudi's increase in domestic consumption initially meant its oil exports only rose from 5.9 million bpd in April to 6.4 million bpd in June, according to Kpler data. Saudi shipments are, however, set to surge to 7.5 million bpd in July, the highest since April 2023. Saudi production and exports are likely to increase further in August as Riyadh seeks to regain market share. Its slice of the global market declined to 11% last year from a 13% average in the previous three decades. The Kingdom's exports to China are set to rise to the highest in more than two years in August, Reuters reported. The increases in OPEC+ output, together with large increases in production outside the group, are set to increase global supply by 2.1 million bpd to 105.1 million bpd in 2025, according to the IEA. The energy watchdog forecasts global demand to reach 103.7 million bpd this year, which implies a significant oversupply of 1.4 million bpd in 2025. Oil prices will therefore likely come under heavy downward pressure in the coming months, particularly once demand ebbs in the fourth quarter. And this downward push will only get stronger if Trump's renewed trade threats turn out to have real bite. Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tabyour essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. Follow ROI on LinkedIn, opens new tab and X., opens new tab
