In response to the Conservatives’ pledge to;
Introduce the Triple Lock Plus
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “The Triple Lock Plus seeks to raise the income tax threshold for pensioners, ensuring that even with an increased State Pension, it remains below the taxable income level.
_“_Over 60% of people aged 65+ paid income tax last year, as the tax free allowance for pensioners has been cut in real terms, leaving many older people worse off in retirement. To preserve the State Pension, some form of index-linking is necessary as without decent and reliable rises to the State Pension, many retired households could lose a vital safety net.
“However, the State Pension is relevant not only for today’s pensioners but also for future generations. An enhanced Triple Lock policy raises the question of whether a continually rising State Pension age may be required to manage escalating costs.”
2p National Insurance cut
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “Putting more money back into the pockets of workers is a clear move to garner support. But it is also one that will make a difference to individual households creating space for them to save or spend.
“This proposal would see the National Insurance rate decrease from 12% at the start of this year to 6%, enabling people to save more money for the future.”
Abolish National Insurance for almost all self-employed people
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “Self-employed workers are a frequently underserved group in pensions, missing out on the benefits of Auto-Enrolment and required to take on a more active role in building up their pension savings.
“This measure could be beneficial in closing the pension gap between self-employed and employed workers, as the former will be able to keep more of their take home pay and save it for the future. However, it’s unclear how this would affect their State Pension entitlement which is currently linked to an individual’s National Insurance record.”
Reform of Child Benefit and High Income Child Benefit Care
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “This horrifically complicated system has had repercussions for parents’ State Pension entitlements. The system is a mess for many reasons, not just because of the unintended consequence that thousands of people were put at risk of poorer retirement outcomes, so it is very satisfying to see this finally being addressed.”
Not included in the manifesto:
‘Pot for Life’
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “The Conservatives have recognised the clear potential in the benefits of people having a lifetime pension provider so they don’t lose old, valuable pensions as they move from employer to employer.
“The reality is people change jobs, pensions get left behind, some are forgotten and retirements suffer so having all of the pensions someone acquires in one place makes sense.”
“This concept could be popular and relatively easy to introduce, ultimately allowing people to take greater control of their long-term finances, so it’s disappointing that further details on the next steps of this process were not outlined.”
