Pensions are left just hanging around

When Theresa May called a snap General Election in April, few would have envisaged the outcome resulting in a hung parliament and no Conservative majority.

Even fewer would have predicted the surge in popularity for Jeremy Corbyn, and an increasing level of support for his neo-socialist manifesto; particularly amongst younger voters.

And amidst the post-election fallout, with May having to ‘cosy up’ to the Democratic Unionist Party in order to put together a Queen’s Speech that will get through Parliament, the focus is principally centred around how ‘soft’ the Brexit process will now become, and whether a cross-party ‘coalition of the talents’ will enter into negotiations with Monsieur Barnier and his crEU, rather than just Conservative Brexiteers.

Whilst that focus persists, other important issues that were covered in the various manifestos remain side-lined.

So, what about pensions?

Nowhere is this more evident than in the area of pensions, where the early truncating of the previous Parliament that was triggered by Mrs May’s voluntary – and now arguably, unnecessary – election call, has left a number of ‘works in progress’ within pensions unresolved.

One of these is the ‘Pension Scams’ consultation, which closed in mid-February, where a government response was expected in “late spring” (a.k.a. now).  As well as banning ‘cold-calling’, which has seen several people with SIPPs and SSAS’ lose their entire pension funds to fraudsters over recent years, the Pension Regulator’s subsequent call for all transfers to SSAS’ (and potentially the establishment of new SSAS’) to be banned, has left SSAS Providers eager for clarity and reassurance.

In addition, the definition of a “Master Trust” in the Pension Schemes Act 2017 could inadvertently affect some SSAS arrangements, which was never the focus of the legislation, and the work that began within the Regulator before the Election to ascertain how many SSAS’ would be affected, needs to recommence with immediate effect. 

And what of the planned reduction to the MPAA, which fell victim to the ‘bonfire of the clauses’ that took place in late April, in order to get the Finance Bill 2017 through to Royal Assent before Parliament was dissolved?  SIPP and SSAS Members, and their Advisers, are now ‘in limbo’ over whether - and if so, from what date - the reduction from £10,000 to £4,000 will take effect from.

Arguably, a government with a healthy majority is at their strongest at the start of a new parliamentary term, and more likely, therefore, to introduce radical policies at that point.

However, a minority government relying on ‘confidence and supply’ arrangements with other political parties to amass enough votes is less likely to undertake radical reforms to pension tax relief, or end the triple lock too soon.  It probably also means that Mick Jagger will continue to receive his winter fuel allowance.

The government will also need to respond to the Cridland Review of state pension ages, and the formal review of Auto-Enrolment; including the possibility of bringing the self-employed into the fold.

Finally, the development of the ‘Pensions Dashboard’ could lose momentum; particularly as the former Treasury Minister, Simon Kirby, who had responsibility for overseeing its delivery, lost his seat on 8 June.

So, what will happen next?

Although the next few years are inevitably going to be dominated by Brexit, there remain plenty of issues on the domestic front to be confronted, with pensions and the needs of an ageing society continuing to feature strongly.

And another event that could further scupper progress and clarity within pensions, is if another General Election was called during 2017.  The last time we had two in a year was in 1974, when I was still in shorts and singing along to “Seasons in the Sun”.  Incredible as this may seem, (two elections, that is – not me in shorts), the fundamental truth is that the Conservatives do not have a majority in Parliament, and Labour can't put together a ‘rainbow’ coalition to secure a majority either.  The events of 1974 would suggest that there may well be another election fairly soon, either by choice or - more possibly - by default.

But who’s going to tell this to Brenda from Bristol?  Politicians are drawing straws, as I write.