The recent release of the Conservative manifesto has been a mixed bag in terms of pensions. Perhaps the most interesting news is that they have pledged to include the self-employed within auto enrolment, echoing the Department of Work and Pensions statement earlier this year that it was in favour of including the self-employed within the successful auto enrolment rollout. However, whilst there has been no clear plan announced by either the Conservatives or the Department of Work and Pensions, the fact that it has been included in the Tory party manifesto, if Theresa May is elected in June it could be good news for the self-employed who would be interested in taking part in auto enrolment.
"In addition to safeguarding the rising state pension, we will continue to support the successful expansion of auto-enrolled pensions, enabling more people to increase their retirement income with help from their employers and government; we will continue to extend auto-enrolment to small employers and make it available to the self-employed," said the manifesto.
Whilst the Conservative Party manifesto may bring good news to the self-employed, it may not be quite as good news for those people whose state pensions are already in payment or who are due to retire in the next few years. The manifesto states that it will stop the triple lock on pensions from 2020 which means that the state pension will no longer be guaranteed to increase every year by the higher of inflation, average earnings or a minimum of 2.5%. Instead, the Conservative party are looking to introduce a double lock.
"We will keep our promise to maintain the triple lock until 2020, and when it expires we will introduce a new double lock, meaning that pensions will rise in line with the earnings that pay for them, or in line with inflation – whichever is highest. We will also ensure that the state pension age reflects increases in life expectancy while protecting each generation fairly."
In contrast, Labour has promised to keep the triple lock until 2025, although they have not committed beyond this date. Speaking at the recent launch of their 'pensioner pledge card', Chancellor John McDonnell said:
"I am delighted to be launching this pledge card that will inform many elderly people in our communities that Labour is not only promising to stand up for pensioners but is determined to ensure they keep the hard-won entitlements they currently hold."