The forthcoming General Election will no doubt affect all our current or future retirement plans in some way or another. It will certainly impact on your financial planning, including your State Pension, savings and investments.
So it is worth taking time to look at what the main parties with candidates standing in your area are promising in their Manifestos. (Just bear in mind that Manifestos are, like the pirate code of Captain Barbosa from ‘Pirates of the Caribbean’, “More what you’d call “guidelines” than actual rules.”)
Our own manifesto on manifestos
This article is provided for information purposes only, and Panthera LIFE has no political affiliations. Panthera LIFE does not seek in any way to influence your political decisions or preferences. Panthera LIFE always encourages you to do your own research, and to consult with your own financial advisor and other professionals on any policies that might affect you personally.
So, in no particular order:
Labour Manifesto
“Labour will protect the triple lock on pensions and increase the state pension each year in line with inflation, average earnings, or by 2.5 per cent, whichever is higher.
A Labour government will … review the current state of the pensions and retirement savings landscape, to check if the current framework can deliver sustainable retirement incomes for people.
We will support pensioners and give them the dignity and security they deserve in retirement. All our plans are fully funded, and we will introduce tough spending roles to keep mortgages, inflation and taxes as low as possible.
We will also give the Pensions Regulator new powers to intervene where schemes fail to offer sufficient value for their members.”
“My message to pensioners at this general election is simple – look at your wallet, look at the quality of your healthcare and look at the lack of housing for your children and grandchildren and ask yourself, is this as good as it gets?”
Liz Kendall, Labour Shadow Pensions Secretary
Conservative Manifesto
“We will continue to do everything we can to provide pensioners with dignity in retirement and ensure the new State Pension is not dragged into income tax for the first time in history by introducing the new Triple Lock Plus.
This has two elements:
1. Continuing to uprate the State Pension in line with the highest of prices, earnings or 2.5%. On current forecasts, this will mean the new State Pension increases by a further £430 in April next year to £11,970; and increases by £1,685 a year to £13,200 by the end of the Parliament.
2. Ensuring that from next year the tax-free personal allowance for pensioners also rises by the highest of prices, earnings or 2.5%, guaranteeing that the new State Pension is always below the tax-free threshold. From April 2025, we will (be)… introducing a new age-related personal allowance. This is a tax cut of around £100 for eight million pensioners next year – rising to £275 a year by the end of the Parliament.
“By opposing the Triple Lock Plus, Labour’s Retirement Tax will mean millions of pensioners paying more tax. It will also mean that for the first time in history, someone whose only income is the new State Pension will be dragged into paying income tax.”
Liberal Democrats Manifesto
“Liberal Democrats believe that no one should fear for their future, struggle to put food on the table, or worry about heating their home. Our aim is to make the UK the best place in the world to work, raise children and enjoy retirement by ensuring that proper support is in place for those who need it.
• Support pensioners by protecting the triple lock so that pensions always rise in line with inflation, wages or 2.5% – whichever is highest.
• Ensure that women born in the 1950s are finally treated fairly and properly compensated.
• Developing measures to end the gender pension gap in private pensions and ensure working-age carers can save properly for retirement.
• Improving the State Pension system by investing in helplines to ensure quicker responses to queries and resolution of underpayments.
• Ending the scandal of lost top-up payments.
• Reviewing rules concerning pensions so that those in the gig economy don’t lose out, and portability between roles is protected.”
For a short summary of what all the five main political parties are offering, see this blog.
What is the State Pension?
“The State Pension is a regular payment from the government most people can claim when they reach State Pension age. Not everyone gets the same amount. How much you get depends on your National Insurance record.
For many people, the State Pension is only part of their retirement income. For example, they may also have money from a workplace pension, other pension and/or earnings.”
How is the State Pension funded?
According to PensionBee, the UK State Pension is:
“Funded by UK taxpayers, specifically through National Insurance contributions. If you’re employed, National Insurance contributions are usually automatically deducted from your wages enabling you to accumulate ‘qualifying’ years towards your State Pension. If you’re self-employed, you’ll be responsible for making sure you’re paying the right amount of National Insurance based on your income.”
State pensions and National Insurance rates
Many pensioners may consider that the rate of National Insurance in the future will not affect them, as they won’t be paying it if they are not employed. However, as the State Pension is funded and paid out of current NI contributions, (not a saved fund or similar), how much is actually available for State Pension payments in the future will depend on:
- The number of people in work, and
- The level of NI they pay.
Any party that plans to decrease the NI rates should detail how they plan to fund State Pensions to make up any shortfall.
Investments and interest rates
At the time of writing, the Bank of England has held interest rates at 5.25%, which is good for savers, but not so good for those trying to get a mortgage or paying off debt. If you have concerns around either income or debt as you approach retirement, talk to your financial advisor.
Review your retirement plans
Retirement isn’t just about finances. A regular review of your retirement planning is always advised to ensure your plans are on track for the lifestyle you want to lead for the next 30+ years.
At Panthera LIFE, I offer a free 30 mins Discovery session so we can talk about your current retirement reality, or your retirement plans and dreams if you’re still working full time.
Whatever else you do, please vote
Your vote is important. Many people throughout history have fought long and hard for your right to vote. Respect their memory and sacrifices, and make your mark, even if it’s outside the boxes.
That’s about as political as we get!
A better retirement with Panthera LIFE
Contact us for your free 30 mins Discovery session and let’s talk about your personal retirement planning.
