The Pensions Policy Institute has set out a detailed analysis of how the main parties’ manifesto pledges could effect pensions and retirement policy in the UK.
This briefing note compares the main election promises on issues such as the pension triple lock, ‘Waspi’ women, pension investment and whether the abandoned Pensions Bill would be reinstated. The paper also compares policies on the controversial issue of the tapered tax relief on higher earners – which has led to many problems in the NHS with consultants refusing overtime for fear of being hit with tax bills.
On a number of these issues there is a surprising amount of agreement between the main political parties. For example the Conservatives, Labour, the Liberal Democrats and the Scottish National Party have all pledged to retain the trip lock, which guarantees the state pension is increased each year by whatever is higher: inflation, earnings or 2.5 per cent.
However while the Conservatives have said they will reinstate the 2019/20 Pensions Bill, Labour has only made firm promises to retain part of this legislation, that relating to the introduction of Collective Defined Contribution schemes.
The Liberal Democrats, SNP and Green Party have made no commitment to reintroduce any part of this legislation.
Elsewhere, the Conservatives have pledged to hold a review into the problems that have arise from the taper on higher earners’ tax relief and the Liberal Democrats have said they will “listen and act” on this issue. However Labour has not given any firm proposals on what it would do on this issue in its manifesto.
Similarly, Labour has not stated what it will do to widen or encourage pension schemes to invest in different parts of the economy. In contrast the Conservatives have said they will harness pensions capital to invest in and commercialise scientific discoveries; while the Liberal Democrats, the SNP and the Green have all made pledges to take steps to encourage pension funds to invest in green technologies and more climate friendly investments.
There is also a divergence around the treatment of so-called ‘Waspi’ women – women born int he 1950s who have been adversely affected the equalisation and then increase to the state pension age.
Labour have said it will design a system of recompense and will legislate to prevent accrued rights being changed in future; the Liberal Democrats have also said they will ensure women are properly compensated while the SNP has said they will continue to “support these women in their fight for fairness”. However the Tories have not given any element of support to this group.
The PPI said: “There is consensus among the main parties in some of the major pensions policy areas: all have pledged to retain the triple lock and many believe care costs should be capped. In addition most have stated their intention to help the self-employed access pensin savings in future.
“However there is divergence regarding how the grievances of women born in the 1950s should be addressed.
“Many of these policy aims – for example retaining the triple lock or maintaining the SPA at the age of 66 involve significant expenditure on pensions.
“The winning party may wish to review their policy portfolio to determine whether they are being appropriately generous to all generations.”
The PPI adds that none of the parties mentioned automatic enrolment contribution increases, though adequacy of contributions is likely to be a significant area of policy interest over the next few years.
