The Media & Labour’s free broadband plan: Whatever happened to evidence?

The establishment media are going mad about the Labour’s free broadband plan saying it will hurt people’s pension plans. Yet they provide no evidence for this. In this post, I provide EVIDENCE that Labour’s plan will save money for people with cash pension pots.

The valuation of BT at the start of November was £20.09 billion The most recent valuation of the FTSE 100 I could get is Jan 2018, which is £2.054 trillion.

BT therefore represents about 1% of the FTSE 100

(NB this is generous as BT’s share price is now lower than Jan 18).

The default fund choice in most cash pension plans splits investments between the UK and global funds. Most typically 60% UK / 40% global.

BT would therefore typically represent 0.6% of someone’s cash pension fund.

If someone had accumulated a value of £100,000 of their pension cash pot, 0.6% of that would be £600.

Assume a worst case, a Labour government offers a 20% discount on BT’s whole share price (ie not just Openreach but everything) a 20% loss on £600 would be £120

On Compare the Market, the lowest price quoted today for a fibre broadband with a speed of 30mps is £21.95 a month, £263 a year.

So in year 1 after nationalisation someone would be £143 better off, if they have a £100k pension pot, by more if their pot is smaller.

In years 2 and after they would save £263 a year Over 5 years the saving would be £1,195.

This calculation took me a few minutes of searching and simple maths. There’s just one of me. The BBC and Sky employ hundreds in their news teams, and no one could do this?

References:

FTSE valuation https://en.wikipedia.org/wiki/FTSE_100_Index…

BT valuation: http://stockchallenge.co.uk/ftse.php

Pension fund split: https://cass.city.ac.uk/__data/assets/pdf_file/0010/367381/default-funds-in-uk-defined-contribution-pension-plans.pdf…

Fibre broadband cost: see pic