Well, who saw that coming? Not the pollsters, or the bookies, or the markets. But nevertheless here we are: Britain has voted to leave the EU.
The effect all this will have on pension schemes is still unclear. The immediate economic impact looks negative but, as our cover page article says, trustees must focus on the long term and not get dragged into the dramatic events of the present, tempting though that may be.
In my view, it is the very fact that things are so unclear that is potentially damaging for schemes. As I was told again and again while researching for this week’s cover story, investors do not like uncertainty.
Britain just voted for massive uncertainty. For an unknown period of time.
The ground is now shifting under trustees’ feet. It might be that some of the consequences turn out to make things easier for schemes. I am sure most of us could name a few people in the industry who would be happy to be rid of the Institutions for Occupational Retirement Provision directive.
Illustration by Ben Jennings
One of the biggest risks faced by the industry comes from the political upheaval we are now seeing, with Prime Minister David Cameron stepping down and a motion of no confidence tabled for Labour leader Jeremy Corbyn.
As I scrolled through social media on Friday morning, I saw a lot of anger and resentment among the so-called millennial generation – to which I belong – about the demographics of the vote. Young people voted overwhelmingly to stay in the EU, while older people voted to leave.
Add this latest grievance to the perceived ease the baby boomer generation had with property prices, rising standards of living and defined benefit pension pots, and the acrimony cranks up a gear.
How long until politicians seek to capitalise on this bubbling resentment? And what will happen to pension guarantees when they do? In an economy facing low growth prospects, a triple lock quickly starts to look untenable.
All this is to say we are in for an interesting ride. What will happen next? No one knows.