Pension reforms expected after Tory majority.
31 Dec 2019
Following the Conservative Party’s comprehensive victory in the general election, sweeping pension system reforms are expected.
The Conservative win means it can implement its pension manifesto pledges announced at the end of last month, which included, holding reviews of the tapered annual allowance and net pay schemes. Plus, plans to reintroduce the pension schemes bill.
The ‘triple lock’ (which is a guarantee to increase the State Pension every year by the higher of inflation, average earnings or a minimum of 2.5%) stays, along with the winter fuel payment and bus passes for those over State Pension age.
Other commitments in their manifesto include:
A shake up in the Defined Benefit (DB) sector
The Conservatives promised to revive the three-part pensions bill, so the Defined Benefit (DB) sector could expect a shake-up, with new powers for the Pensions Regulator and the introduction of criminal proceedings for directors who fail to adequately protect DB schemes.
A fundamental reform of the tax treatment of pensions
Tinkering could make the pension system more dysfunctional, and the best solution would be a fundamental reform of the tax treatment of pensions across the board.
The Pension and Lifetime Savings Association (PLSA) voiced support for tax reforms and the pension bill, but said in a statement the Government “must not stop there” calling for more work towards retirement income adequacy.