By Iain Withers and Tommy Reggiori Wilkes
LONDON (Reuters) -Britain must not deter pension savers with tax changes in next month’s budget, Legal & General CEO Antonio Simoes told Reuters, adding that uncertainty was souring investment as the UK’s biggest investor battles to sell its own strategy.
Simoes, who has led the FTSE 100 giant since the start of 2024, said clarity was needed amid concerns taxes could rise for savers, the wealthy or businesses in UK finance minister Rachel Reeves’ budget on November 26 to fill a fiscal black hole.
“I see a lot of pent-up demand for people to invest in the UK. But people are sort of waiting now,” said Simoes, adding that any tax changes to pensions that put off savers would be “really concerning for the country”.
Simoes said he also needs to do better at convincing investors of his strategy for L&G, which offers life insurance, pension and investment products.
He vowed to improve performance at its capital-light asset management and retail units while dismissing concerns demand was waning for L&G’s biggest profit generator, buying pension schemes from companies.
UK FISCAL WORRIES WEIGH
Simoes, who has supported the government’s economic policies since Labour won power last year, reiterated his backing for reforms such as easing planning laws, days after L&G committed 2 billion pounds more to British housing and infrastructure.
He believes Reeves will find a budget formula, but said that investor concerns about Britain’s economy were weighing on L&G’s shares, which are down 4% since he started as CEO.
“Some of this is linked to (the UK budget) and sentiment towards the UK. We tend to be a proxy for the UK economy,” he said, adding that as a big investor in government debt L&G wanted to see “fiscal sustainability”.
British rival Aviva has seen its stock rise more than 40% this year as it focuses on business lines demanding less in capital.
‘SHOW-ME’ PHASE FOR L&G STRATEGY
Simoes, a former HSBC and Santander banker, was a surprise pick to lead L&G. He has sought to simplify the sprawling 189-year-old group – selling housebuilder Cala and its U.S. insurance unit – while promising bigger returns.
“What I need is to convince investors that the growth story is there… We’re very much in the ‘show-me’ phase,” he said, adding that he would like the share price to be higher and wanted more growth-focused shareholders on board.
L&G dismayed some investors by paring its dividend growth but Simoes said its share price did not reflect plans to return 5 billion pounds including through buybacks over three years.
