The assurance sector has been disinvesting in business in the first quarter of 2010, and putting its money hugely into Government securities, according to new data issued by the Office of National Statistics today.

These institutions sliced two-thirds off their stock market investments, removing £11 billion in total. By contrast, they trebled their amount in the gilts pot to over £12 billion. The figures suggest an almost uncannily perfect direct swap.

The good news is that so many institutions have faith in Treasury funds. The bad news is that everyone is obviously expecting equities to head south (they already are) and – yet again – the potential for business to invest is reduced.

But there is a much bigger googly in these numbers. (For US readers, that’s a curved ball, not a misspelt search engine). None of these figures are particularly large: they’re what’s left over after expenses have been taken off the gains. In fact, considering the demographic baby-boom bulge heading for retirement, the stats are disastrous: this is a classic case of a sector making very little money for itself, and even less for its clients.

That means even some of the folk our Government might have ruled out of any dependence on the State now need to be pencilled in. And with the crumbling Aged Care system inherited from New Labour, it’s the last thing the Treasury and DSS wanted to hear.

But they undoubtedly have bigger fish to fry….or even catch. But any of them are reading, I leave you with one parting thought: if Britain’s deficit gets out of control, the whole assurance and pension industry will be going with it – and following all the money they’re going to lose when the commercial property market goes bang, that means we really will all be dead in the same ditch.