General Election Shakes-Up UK Pensions Policy

20 April 2017

Will The General Election See a Shake-Up In UK Pensions Policy? With a growing number of pension experts and Tory MPs calling for the pensions triple lock to be axed, Theresa May's shock announcement of a June 8 general election could be its final death knell. The triple lock, which guarantees annual increases in line with the highest of inflation, average earnings, or 2.5% has been the subject of much debate, with many calling it unaffordable including Tory MP Kelly Tolhurst and former Conservative pensions minister Baroness Ros Altmann who was recently quoted as saying:

"Guaranteeing a 2.5 percent increase makes no economic or social sense and it will end up costing billions. It's also a political construct that purports to offer great protection while increasingly disadvantaging the oldest and poorest pensioners."

Labour, however have pledged to keep the triple lock until 2025, with shadow chancellor John McDonnell saying "It's a national scandal that pensioner poverty is rising and the Tories are refusing to commit to keeping the triple-lock or compensate women worst affected by the speeding up in the state pension age."

If the polls are to be believed, the Labour Party could be in for some big losses which will see Theresa May increase here currently slim parliamentary majority significantly. If this is the case, it could give her government the mandate to be much more radical with pensions policy such as the triple lock, the qualifying age for pensions, pension freedoms and auto enrolment.

Former coalition pensions minister Sir Steve Webb says that radical pension policy could come into force BEFORE the election.

"A snap general election throws pensions policy up in the air," he said. "If May secures a bigger majority, radical reform of things like pension tax relief becomes much more likely. The triple lock on the state pension must now be up for grabs. With inflation approaching 2.5%, the cost to the Treasury of the triple lock becomes relatively small. If the Conservatives were to decide to scrap the triple lock in the weeks before a general election, it would be a sign of supreme confidence about the likely outcome of that election."

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      Rupert is Smart Pension's marketing team manager. Working across all marketing verticals to support the business's growing requ…