How the UK election could impact pensions
By Kirsten Hastings, 31 May 17
What looked like a sure thing when UK prime minister Theresa May called the snap election back in mid-April has turned somewhat muddy. Aegon pensions director Steven Cameron has taken a look at what the parties’ manifestos mean for pensions.
The government deferred its planned response to the Cridland review of state pension age when the snap election was announced. Their manifesto limits comment to saying the state pension age will ‘reflect increases in life expectancy while protecting each generation fairly’.
Labour is against the current plan to increase state pension age beyond age 66 and would set up a new commission to consider a flexible approach ‘to reflect both the contributions made by people, the wide variations in life expectancy, and the arduous conditions of some work’.
Greater flexibility sits well with pension freedoms and the trend towards retirement based on personal circumstances.
However, linking the state pension age to work conditions and individual life expectancy could become a minefield – difficult to monitor to avoid people taking advantage of the system and highly subjective.
Cameron said: “[Aegon] believe that a more inclusive, less divisive and more straightforward solution would be to open up flexibility to all, regardless of their circumstances, to take their state pension a few years early, at a reduced level for life to make this fair and affordable.
“When looking at the state pension age and the rate at which its level will increase as a whole, the key message has to be that it’s not safe for anyone to rely entirely on the state pension. When it comes to meeting retirement income aspirations, it’s essential that people join their workplace scheme or make individual private provision.”
