On the go: The Conservative party has promised to bring back Guy Opperman’s three-part pensions bill if re-elected, in a manifesto that largely maintains the status quo in retirement saving.
The pension schemes bill introduced in the Queen’s Speech in October gives the Pensions Regulator new powers over defined benefit and would enable pensions dashboards and collective defined contribution schemes. At the time of its drafting the bill attracted bipartisan support, but the calling of December’s general election prevented it from being debated in parliament.
“We will reintroduce legislation that protects pension pots from being plundered by reckless bosses, helps savers be better informed with pensions dashboards, and creates a new style of pension scheme that is more sustainable for workers and employers,” the party said in its manifesto released on Sunday.
The Conservatives have also pledged an “urgent review” of the pension tax problems affecting senior National Health Service staff, to be carried out within the first 30 days of a new government.
The operation of the tapered annual allowance trigger means doctors can be penalised with huge marginal tax rates for working the extra shifts needed to keep the health service running.
The review will be the Conservatives’ fourth attempt at solving the crisis. Two successive consultations have aimed to skirt the issue by increasing the flexibility in the NHS pension scheme, while last week it emerged that NHS England will replace any benefits lost when staff use the ‘scheme pays’ function to pay the tax.
The Tories have also pledged to keep the triple lock for increasing state pensions, and fix a quirk whereby low-paid savers into ‘net pay’ pension schemes miss out on tax relief.
The manifesto also includes a pledge to “unlock long-term capital in pension funds to invest in and commercialise our scientific discoveries, creating a vibrant science-based economy post-Brexit”.
Commenting, Sir Steve Webb, director of policy at Royal London, said: “It is welcome that the Conservative manifesto refers to two of the various anomalies in the pension tax relief system. On low-paid workers, the manifesto represents a welcome shift in position after the government has refused to act for several years.”
However, he added: “But on the tapered annual allowance, the measure proposed is far too narrow and may not even work. The allowance affects far more people than senior NHS clinicians and creates complexity and uncertainty in the tax system. The best solution would be to abolish it outright.”
