Following the news of the Labour party winning the general election in a landslide victory, the pensions industry has given its views on what it wants to see from the incoming government.
Tom Selby, head of public policy at AJ Bell, said any new chancellor would always have the temptation to tinker with pensions taxation, particularly during a challenging fiscal environment.
However he urged for any reforms in this area to be focused on the long term and encouraging more people to save and invest for their future.
“The decision by Labour to ditch plans to reintroduce the pensions lifetime allowance, a reform that would have added complexity and discouraged investment risk, is hopefully a positive indication that Labour will take a pragmatic approach in power.
“Given people saving in a pension are often committing to lock their money up for decades, some stability in pensions policy, particularly around the tax rules and limits, would be welcome,” he added.
Pensions and Savings Commission
Aegon has called on Labour to create a ‘pensions and savings commission’ within the first 100 days of taking office to review previous government proposals alongside Labour priorities.
The provider has said the top four priorities should be auto-enrolment enhancements, targeted support, pension dashboards, and the value for money framework.
Steven Cameron, pensions director at Aegon UK, said: “With pensions being such an important long-term savings vehicle for millions, changes shouldn’t be rushed. And however ‘super’ the Labour majority, cross-party support can offer stability and certainty.
"We need a well-thought-through, logically-sequenced reform agenda, and the pensions industry stands ready to support this.
“Labour is likely to have its own list of ideas to explore, with rumours of reviewing the pensions tax system. There, completing the regulations to abolish the lifetime allowance is particularly pressing.
“Labour is also coming to power with many of the previous government’s pension plans still under development. To allow progress, we need clarity on which will continue, change or be cancelled.”
Pot for life
Becky O’Connor, director of public affairs at PensionBee wanted to see the new government address the ‘pot for life’ solution to tackle the pressing issue of lost pension pots in the UK.
She explained: “With more £50bn at risk of being forgotten in old pensions, immediate action is essential for better retirement outcomes for consumers.
“We also hope the Labour government will advance plans to extend auto-enrolment by removing the lower earnings limit for contributions and lowering the enrolment age to 18.
"Early contributions are invaluable due to the benefits of compounding growth, and such measures will significantly strengthen the future financial security of the UK workforce.
“Finally, we seek detailed insights on how the Mansion House reforms will align with the UK’s economic growth strategies while ensuring favourable returns for pension savers.
“Clarification is needed on how exposure to UK growth opportunities will be tailored to the proximity of savers to retirement, particularly as older savers tend to invest in lower-risk assets to safeguard against market volatility and potential downturns.”
