Kanishka Narayan

It is a privilege to speak with you in the Chair, Mrs Hobhouse. It is a particular privilege to follow my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson), who secured this debate and led it with expected expertise. I know that he brings a great deal of professional experience from his career prior to this place. It also a privilege to see the Economic Secretary to the Treasury in her chair. I know that she also brings vast expertise and experience to this debate from both her time in this place and prior to it. For those reasons, I will humbly keep a short focus on five particular segments of potential retail investors in my remarks. My hon. Friend the Member for Buckingham and Bletchley was very accurate in noting the focus of the debate. For me in the Vale of Glamorgan, as will be the case for many other colleagues, the focus must be on ensuring that individuals can not only accumulate prosperity through retail investment but ensure dignity, and that is the first segment of particular interest. For millions of households, retail investment is a question of saving up for a rainy day. For many households in the third decile of wealth in this country, with average net financial savings of about £1,500, the path to retail investment is through a low-cost—or hopefully even a zero-cost—accessible money market or index fund. The fundamental focus for those individuals is on how we support not just the right level of interest rate provision from our retail banks, which is absolutely necessary, but the advantages of technology in distributing index funds in a way that is accessible and understandable to many of those households. The secondary category is novel in its composition: the young in this country. While about 39% of adults in this country have invested actively, an overwhelming third of those started during the pandemic. The vast majority of those who started in the pandemic and afterwards are aged between 18 and 34. The patterns of behaviour in that category are radically different from others across the country: 58% of 18 to 24-year-olds hold cryptocurrency as their primary asset holding; among those aged between 55 and 65, holdings in that asset class are negligible. Cash ISAs are not particularly prominent for those young individuals at the moment. For them, the interesting and salient question is how to make sure that we have a bridge to wider responsible investing across asset classes, which builds for the long term, alongside doing what they want in holding cryptocurrency or other assets. The third category is critical to the nation’s future and private investment in this country: those who do not invest in equity today. My hon. Friend the Member for Buckingham and Bletchley has come up with a series of good practical ideas on supporting them into equity markets, but given that most of our financial assets up until the seventh or eighth decile of wealth lie in pensions rather than direct financial assets themselves, I feel that pensions will be the primary gateway to ensuring that retail investors have a bit more of a say in allocation that supports the country’s long-term goals. In the United States a 401(k) culture of people being able to exercise discretion in what happens with their pensions has led to a radical shift in retail holding in equities in particular. The Economic Secretary to the Treasury has been at the frontier of making reforms to our pension system in her prior role and now as well. In addition to supporting funds, shifting their allocation, really pushing ambition on the implementation of the pensions dashboard and in the movement to open pensions, the data, transparency and empowered control that will help many of us to make greater moves into supporting British and wider businesses is fundamental.