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What does the General Election mean for your pension?

Tom McPhail tells Emma Wall what Labour, the Conservatives, the Liberal Democrats and the SNP are planning when it comes to your retirement income.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

  • The major political parties all promise keep the triple lock for your State Pension
  • The Conservatives and Labour have pledged to keep Winter Fuel Allowance for pensioners
  • The Conservatives and Labour are committed to reviewing the annual allowance taper

Read transcript

Emma: Hi I'm Emma Wall and joining me today is Tom McPhail to talk about what the political parties want to do with your pension. Hi Tom.

Tom: Hello Emma.

Emma: So we're nearing the general election and we know more information now than we did before about what the different major parties want to do to the state pension, we'll start with what's in the bag?

Tom: So I think it's true to say all the political parties have learned from the 2017 general election. They all recognise the importance of pacifying this group so on on state pensions first of all they've all said they're going to keep the triple lock - the guarantee to raise the state pension by the highest of two and a half percent and inflation and earnings. That's gonna cost over the long-term several billion pounds so that's more money going to pensioners but I don't think any political party has the courage or the commitment to take that one away. I think as interesting is the fact that we've already had the Conservatives in previous administrations raising the state pension age it's on its way up to age 68. Well Labour have said they're going to freeze the state pension age at 66 and that too will cost in the long term tens of billions of pounds. That is a very major commitment that hasn't actually had a great deal of media coverage so far. And the SNP have also said that they are fundamentally opposed to any further increases to state pension age so some clear water there between between left and right of the political spectrum. Labour have also committed to increase state pension for overseas pensioners - people that have emigrated from the UK and that too will cost several hundred million pounds a year and finally the big one is the women against state pension inequality the WASPI campaigners, where Labour have promised them around 58 billion pounds of compensation. It's worth noting Labour are not alone on this – the Liberal Democrats, the SNP, the Greens, everybody, even the Brexit party have said that they would look to make some similar kind of compensation to the WASPI women. The only ones the outliers on this other Conservative party who repeatedly keeps saying though we're just not going to pay you any more money.

Emma: Broadly though positive for the state pension as you say everyone's either going for the triple lock or some sort of age freeze. If we have a look at other benefits in retirement however there's a bit more of a dichotomy between the parties isn't there?

Tom: Yep so again on the winter fuel allowance both the Conservatives and Labour have said they're going to keep the winter fuel allowance now that's not small beer that's a couple of billion pounds a year again. Labour and the Conservatives have said they'll keep the free bus pass the others just haven't mentioned it in their manifesto so they're not saying they're going to get rid of it but they're just not mentioning it and I think the other one worth picking out is the TV licence where the the SNP for example said yes we'll keep it. Labour said yes they'll keep it, the Conservatives has said yes we'll keep it but they want the BBC to pay for it so there's a bit of a distinction there and the outlier on that one is the Brexit party that said they'd scrap the free TV licence altogether for the over 75s.

Emma: So then it looks like for people in retirement they're being reasonably looked after by the major political parties obviously they're not stupid that is the main voting population. What about then if we look at working pensions - workplace pensions?

Tom: So again on workplace pensions we've had a lot of publicity recently about what's called the annual allowance taper, the particular problems affected doctors that's preventing them doing overtime and preventing work getting done in the NHS and both the Conservatives and Labour have committed to review this. It's worth pointing out the Conservatives have had several years when they could have done something about it and indeed the problem is one of their own making because they introduced the annual allowance taper but they promised to fix that. The Conservatives have also promised to address this what's called the net pay anomaly, this problem where low paid workers are not getting tax relief on their private pensions. Labour have said nothing more about pension taxation but I think it's worth highlighting the fact that elsewhere they're looking at increasing taxes on higher earners the more tax you pay the more tax relief you get on your pensions so I find it hard to believe that if we have a Labour government and they increased taxes they won't then look at ways to cut back on the tax relief given to higher earners.

Emma: And historically have done that in the past haven't they it was a Labour Chancellor that did just that?

Tom: Yes indeed so we'd expect to see more in that area for the rest I think it's interesting the parties have been pretty quiet on pension taxation there's a lot of unfinished business, there are a lot of anomalies in the system but for now they're just leaving that well unknown probably because they don't want to risk upsetting anybody.

Emma: Tom thank you very much.

Tom: Thank you.


HL is not expressing a view on the merits or otherwise of any of the policies or any of the political parties, and nothing in this video should be taken to be an endorsement or recommendation of any particular party, candidate or policy.

Views as at date of filming - 2 December 2019.

Read more of our general election coverage

All our latest expert comment in one place.

General election 2019

HL is not expressing a view on the merits or otherwise of any of the policies or any of the political parties, and nothing in this note should be taken to be an endorsement or recommendation of any particular party, candidate or policy.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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