What now for pensions?

22 June 2017

Now that the dust has settled on the UK General Election result, it appears clear that the Tories will continue in government as the largest party in Parliament, albeit without a parliamentary majority. But with much of the Conservative manifesto jettisoned in yesterday’s Queen Speech, what can we expect to change over the coming months? And will any unanswered questions be addressed? Andy James, head of retirement planning at Tilney, looks at how pensions may fare.

Andy James, head of retirement planning:

“Following the election result and the fact that the Conservatives do not have a parliamentary majority (and currently, no deal with the DUP) their plans to scrap the state pension triple lock appear dead in the water for duration of this parliament – though this will need to be done at some stage as it is unsustainable as it is.

“With other planned Tory measures to curb spending now also off the cards, but continuing pressure to loosen the fiscal purse strings, the Government is likely to need to raise taxes or return to an overhaul of pension tax relief. Under George Osborne’s tenure as Chancellor, the Treasury had conducted a review into the future of pension tax relief but reform was shelved on the basis it was ‘not the right time’ for a radical upheaval. Instead we got somewhat of a ‘sticking plaster’ with the introduction of the LISA.

“The introduction of a flat rate pension rate – at 30%, for example – would help generate revenue, while ensuring that the only people negatively affected will be the higher earners, who most likely rely a lot less on their state pension than middle and low income earners. Such a move would increase the attractions of pensions to the majority of the public who are subject to the basic rate of tax.

“Whatever happens, it is clear that we are in a period of huge uncertainty which will probably remain until the Chancellor’s budget towards the end of the year. So far, the fact we have the same Chancellor is a small token of stability. But in this ever changing environment, who knows if this will be the case by the time the Budget occurs. As always, if you have any deep concern over your finances and their future, make sure you consult your financial planner.”

About Tilney

Tilney is a leading investment and financial planning firm that builds on a heritage of more than 150 years. The Tilney Group operates under the Tilney brand for Investment Management and Financial Planning and Bestinvest for execution-only investing. We look after more than £22 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including Best Fund Platform and Best SIPP Provider at the 2017 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Group employs over 1,000 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.