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Pensions questions after snap general election announcement

20 April 2017

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Pensions experts are speculating about the future, after the Prime Minister called for a general election in June this year, two years earlier than scheduled.

If it goes ahead, the general election will take place on 8 June.

Richard Parkin, head of pensions policy at Fidelity International, said the election could be highly significant for the industry, leading to faster and more impactful change.

"Although the Government will be busy with Brexit, this could be significant for pensions," he said.

"Rather than causing Government to postpone elements of policy making, it may embolden them to do more."

Parkin said the big issue for pension funds to consider in the context of the early election, is tax relief.

"The main reason this was shelved was because of fears around a reaction from within the Conservative party, but with a big majority, they could go for reducing relief," he said.

Triple lock and pensioner benefits could also come under scrutiny, Parkin said, if the Prime Minister wants to be tough without alienating voters.

How each of the major political parties chooses to address the key pensions issues, could also have an impact on voters – some of whom will be directly impacted by the outcome.

Broadstone's technical director David Brooks outlined some of the key issues each party needs to address in the next two months, if the general election goes ahead.

Along with tax relief, Brooks points to auto-enrolment, state pensions, and equality in terms of death benefits for same-sex couples, as the major issues for consideration.

He said: "With lower opt-outs than expected, it would appear that the general public likes the auto-enrolment method, so pledging to extend it could be a vote winner if people feel included."

Parties will also need to answer more general questions about the future, such as whether pensions would be best serviced the creation of a strategic independent retirement commission, and improving financial education is essential.

"Calls for an independent retirement commission have been resisted by political parties for years but with the mounting list of difficult decisions, it would seem like a get out of jail free card to appoint a commission to make recommendations that the Government can enact," said Brooks.

First published 20.04.2017

Lindsay.sharman@wilmingtonplc.com