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The political parties’ pension promises

With the general election just a couple of weeks away, the main political parties have laid their cards on the table and told us what we can expect if we elect them on June 8. We’ve seen the shakeup of social care, tax hikes for higher earners and the abolishment of free school meals hitting the headlines, but what is each party promising when it comes to our pensions?

  • The Conservatives

One of the main points to be picked up on from the Conservative’s campaign has been to ditch the triple-lock guarantee from 2020. Currently the triple-lock guarantees that the state pension will increase every year by whichever is greater; inflation, average earnings or 2.5%. Although this was once a positive thing, in recent times with low inflation and low average earnings, the increase has always been 2.5%. Theresa May’s pledge to reduce the guarantee to a double-lock and eliminate the 2.5% could save the government around £6bn each year and could possibly delay an increase to the state pension age.

The Conservatives are also pledging to give more power to The Pensions Regulator, which is exactly what is required if we’re to put a stop to situations like we’ve seen happen with BHS. Theresa May has said her party will allow The Pensions Regulator to block mergers and acquisitions and make it a criminal offence for a company to deliberately sabotage a scheme.

For the self-employed, the Conservatives would make auto-enrolment mandatory. This is welcome news following a recent study suggesting that self-employed in the UK are the worst in the world when it comes to planning for their retirement. We think it’s about time the government stepped in to guide them, and including them in the hugely successful auto-enrolment scheme could be just the answer.

  • Labour

Contrary to the Conservatives, Labour has vowed to keep the triple-lock guarantee until at least 2025 and has refuted an increase in pension state age.

Jeremy Corbyn’s party has also said they will support the 2.5 million women born in the 1950s who have had their state pension age changed without fair notification with some kind of compensation for their losses. This is good news for the Women Against State Pension Inequality (WASPI) who have been campaigning for this injustice to be recognised and addressed.

Labour has also mentioned they would like pension schemes to be able to consolidate into “large efficient pension funds” to reduce running costs for employers and provide better benefits to members.

  • Liberal Democrats

The Lib Dems too have said they would keep the triple-lock guarantee, at least until the end of the next parliament.

They will consider introducing an increased single rate of pensions tax relief. This would be a huge simplification to the way pension schemes are administered and would be welcomed by the UK’s pension industry.

The party has also promised to scrap any remaining marriage inequalities when it comes to pensions.

  • Plaid Cymru

Like Labour, Plaid would look to keep the triple-lock and don’t have any plans to increase the state pension age.

A key focus for the Party of Wales’ manifesto is reducing the amount the government takes from the Mineworkers’ Pension Scheme surplus so that members of the Mineworkers’ Pension Scheme can have better benefits.

Stuart Price