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Read between the lines of the pension pledges

Turnout is expected to be a key issue in this general election and so the the parties’ appeal to the grey vote and pension policy is particularly important.

Labour has continued with their “wait until Turner” pol- icy, a move of particular pol- itical risk, given the power that it gives to the Turner commission’s final report.

In light of this, commentators have spent more time trying to read between the lines of the Labour election manifesto. Adding to Work and Pensions Secretary Alan Johnson’s favour-able remarks about the citizen’s pension, the mani- festo notes that any reform to the state system would have to be both simple and favourable to women.

Their March policy document noted they would be “looking at whether a residence-based (as opposed to contribution-based) eligibility for the basic state pension would provide a cost-effective way of improving entitlements”.

This policy document also noted, before the Tory announcement about creating a lifestime savings account, that a future Labour Government would be “encouraging the development of new savings vehicles which give people the chance to combine the benefits of Isa and pension saving”.

Ending a week of speculation, Tony Blair noted on Monday that any decision to introduce compulsory pensions would have to be put before the electorate in a general election.

The LibDems pledge a citizen’s pension of £109, tied to earnings, for all people over 75, with a view to extending this to all pensioners. They have promised to make auto-enrolment compulsory and have continued their opposition to the compulsory annuity rule.

Outside of their manifesto, the Lib Dems have noted that they would get National Savings to provide a cheap pension product that could perhaps replace stakeholder and they would consider scrapping S2P. They have also pledged to introduce an occupational pension “kitemark”.

Labour’s manifesto promotes the work done by the Office of the Deputy Prime Minister to increase shared-equity schemes for local housing and the Chancellor’s changes to stamp duty.

The LibDems have pled-ged to raise the lower threshold for stamp duty to £150,000 and their housing policy is based on mutual housing, with first-time buyers able to buy shares in a local housing fund to generate the funds needed to buy on the open market.

I would expect a future Labour Government to consider changes to the equity-release market. Their March policy document notes that they plan to “investigate the overall effect of a bigger equity-release market and what potential there is for people to use the capital tied up in their homes more flexibly and prudently through the life course” and I know that two new Labour thinktanks are also reviewing how pub- lic policy can increase the cap- acity of the market.


Secure second tranche

Clerical Medical is offering a second tranche of its secure investment plan, a capital guaranteed product providing exposure to the FTSE 100.

Threadneedle switches managers

Phil Cliff is to take over from his boss, Darrel ODea, as manager of Threadneedles European Select Growth fund. Cliff has been number two on the team and currently also manages Threadneedles pan-European Accelerando fund. He will now switch roles with ODea, who becomes deputy manager on the select growth fund.


l “I’m on tip-top form, albeit recovering from a nasty fall and, no, I wasn’t drunk, I was out walking my dog and didn’t see a hole in the ground.” – Britannia’s Ingerlise Bulloch. l “I specialise in body parts.” – Mike Williams, head of general insurance at Bankhall. l “I think being frightfully posh […]

Planning now for the residence nil-rate band

Graeme Robb, senior technical manager at Prudential, writes about the residence nil-rate band and the advice opportunities it presents for you when tax year-end planning with your clients. On our Planning Matters hub, we considered a widow, Margaret, and a married couple, John and Anne, for whom the residence nil-rate band (RNRB) is influencing planning […]


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