Tories set out their stall for pension reform
Share
The Conservative party has pledged to restore the link between the basic state pension and average earnings if elected, but has not given details about when it aims to make the change.
According to the Tory manifesto, published today, one of the party’s priorities is to encourage saving.
It states: “We will help stop the spread of means-testing by restoring the link between the basic state pension and average earnings, making it worthwhile for people to save.”
The basic state pension must be linked to earnings by 2015, regardless of which party comes to power. Yesterday the Labour party announced it plans to achieve this by 2012.
The Conservative manifesto reiterated plans to end compulsory annuitisation at 75. They also pledged to “reverse the effects of the abolition of the dividend tax credit for pension funds”, but gave no more details on how this will be done and said this would only happen once resources allow any changes.
The Tories say they will reinvigorate occupational pensions and work with employers and industry to support auto-enrolment into pensions, while also addressing the disparity between public and private sector pensions. They would cap public sector pensions above £50,000.
In addition, the Tories are promising to raise the IHT threshold to £1m , paid for by a flat-rate levy on all non-domiciled individuals.
The party would also permanently raise the stamp duty threshold to £250,000 for first-time buyers and push ahead with their plans for a free financial advice service, paid for by the industry.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
View results 10 per page | 20 per page
Readers' comments (11)
Julian Stevens | 13 Apr 2010 2:19 pm
It's good to see a commitment to end compulsory annuitisation, though the Conservatives don't yet seem to be saying anything about what will be available instead. If it's just more of these complicated, confusing and un-comparable third way products, then scrapping annuitisation will hardly have been much of a step forward.
That aside, I still wonder why Crash Gordon remains so resolutely opposed to annuity reform? The old argument about security is vastly outweighed by the need for a new product. All that need be done is to build in an insurance element to safeguard continuation of the same level of income in the event of the fund burning out and hey, presto, you have a largely fit and forget lifetime retirement income plan that'd be very nearly as secure as an annuity but delivering much more income. On what grounds could any reasonable politician reject that?
Unsuitable or offensive? Report this comment
Chris Glen | 13 Apr 2010 2:25 pm
round in circles!
We used to have a free advice service paid by the industry through commission.
Tories need to realise that somebody has to pay nothing is for free. The other customers end up paying
Unsuitable or offensive? Report this comment
Anonymous | 13 Apr 2010 2:33 pm
Surely Gordon's reasons are as per normal? - increased tax revenue from retirement income/death in ASP etc
Unsuitable or offensive? Report this comment
Rob | 13 Apr 2010 2:39 pm
Chris. "We used to have a free advice service paid by the industry through commission"
Really! What planet do you live on?
Unsuitable or offensive? Report this comment
Anonymous | 13 Apr 2010 3:01 pm
Do we currently have compulsory annuitisation at age 75?? (Easy to end something if it doesn't exist in the first place).
Unsuitable or offensive? Report this comment
R Woodruff | 13 Apr 2010 3:15 pm
All looks like its going to be a shambles. RDR we have to spend hours to get qualified plus the cost of exams. I understand the current pass rate is very low so there will be additional costs. Then when we get qualified we have to give advice for free! What planet are any of them on?
Unsuitable or offensive? Report this comment
Anonymous | 13 Apr 2010 3:58 pm
Back to the real world!! Where is the money coming from for all these changes and tomorrows promise of increased old age pension (What's that old saying about tomorrow never comes)
All these savings from a Shadow Chancellor who cannot even get his own expenses correct
Unsuitable or offensive? Report this comment
Anonymous | 13 Apr 2010 4:09 pm
Brace yourselves (everyone that's still trading as an IFA that is ....) for the next round of "Pension Simplification" .... What a load of Bollox! ....
Why can't we turn the clock back 10 years - Why did they ever try to fix something that wasn't broken?
Now there's very little left worth fixing - everyone for themselves!
Unsuitable or offensive? Report this comment
M J Winfield | 13 Apr 2010 8:12 pm
Hey,Hey,Hey, promises,promises.promises.
Being an elected or appointed representive must twist the brain, Just beware of gravytrain jockey's bearing promised gifts before elections.
They are there to feather their own nests, The truth is such people only ever react to protect their genitals from a kicking.
Call it human nature if you like
Unsuitable or offensive? Report this comment
Anonymous | 14 Apr 2010 9:58 am
All my adult kids tell me that politicians are liars. Sad reputation to have.
Unsuitable or offensive? Report this comment