Gower Corporate Pension Schemes - Member briefing June 2026

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness”, (Charles Dickens, A Tale of Two Cities, 1859)

We currently grapple with many contradictory truths and Dickens’ famous opening to his own take on transitional times captures the paradox of our Times.

We are arguably at the edge of huge technological developments and opportunities, while simultaneously fearful of the impact they may have on our current way of living and working, as well as the wider world beyond.

Given the pressures of the Energy Transition, geo-political threats and conflicts besetting the UK, providing clarity around domestic security issues such as Defence, Energy and Cybersecurity would seem a matter of urgency.

Just when political stability is essential, we appear to lurch from one crisis to another. Or from a UK perspective, one Prime Minister to another with 6 people holding that post in just the last decade (even Italy has only had 5).

Challenging times indeed, but you would struggle to note this in any meaningful way when viewing global stock markets. Yes, concerns are raised as to the circular funding methods employed in some sectors of the market. Or indeed, whilst theoretical at this stage, what our pursuit of AGI (Artificial General intelligence) will mean for our future economies and societies.

Corporate earnings remain solid in many sectors despite the numerous headwinds. As referenced, the momentum and enthusiasm around the various technological applications being developed and their anticipated impact on productivity continue to be well supported.

This justifies high valuation metrics and feeds the robust performance we have witnessed through much of 2026. Yes, there has been volatility, but this has been a friend to investors with a wider participation of different

sectors in the stock market’s upturn, as opposed to the narrow technology-centric performance that has dominated recent years.

Viewing the evening news of course provides further perspective as conflicts trigger unintended consequences, combined with the human cost in the affected regions. A great many secondary effects are felt or are soon to be felt in the form of increasing commodity prices as global trade is hindered or made higher risk, leading to stickier inflation. Few economies can grow with high relative energy costs. Despite the latest claims of successful cease fire talks, the backlog of food, fuel and fertiliser supplies will keep prices elevated for some time to come.

In broadening further, bond market yields or long-term interest rates act as a thermometer for the state of a nation. High yields indicate a greater risk or lack of faith for investors. At the time of writing the 10-year Government bond yields of Portugal, Italy, Spain and Greece (with the crude market acronym of ‘PIGS’) all sit below those of the UK!

Even the much-maligned Liz Truss could not manage to break the 5% barrier for long-term interest rates which has recently been experienced. These levels have not been seen since the start of the Great Financial Crisis. It is a further illustration that alarm bells are ringing for the UK, but who beyond the bond market is listening?

Many such developments tend to lock in higher levels of inflation leading to burgeoning interest rates and borrowing costs. These challenging times magnify the need for careful preparation to ensure your current planning is sufficiently robust to cope with any modifications needed.

Those with assets - real or financial – tend to benefit from inflation and currency devaluation while those who depend on wages alone will experience a gradual decay in living standards. Inequality and social unrest are a natural symptom of this growing divide. It is no wonder that US consumer sentiment measures are at their lower ebb in decades.

To this end, all the portfolios across which members invest have performed well in absolute terms and relative to the sector averages which they are compared with. As I have mentioned in the past, where members have

adopted greater degrees of investment risk, there has been clear reward for this increased exposure to potential volatility.

Pension portfolios are of course not managed based on capricious news media heralding good or bad news items. They are instead founded on sound fundamental judgement, high quality asset allocation and well diversified portfolio management.

In conclusion, while there are no doubt some sobering take aways, I suspect there will be few surprises. The better informed or prepared our financial planning is, the better the defence or healing potential it provides when economic headwinds blow.

The team at Gower are of course always on hand to help with any aspect that members may wish to review or discuss.

Risk warning: Please note that the value of investments can go down as well as up, and you could get back less than your original investment. Past performance should not be used as a guide to future returns. Where investments are denominated in foreign currencies, changes in the rate of exchange may have an adverse effect on the value or price of the investment in Sterling terms.

Gower Financial Services Ltd. is licensed and regulated by the Guernsey Financial Services Commission. Company registration number 37312.