The results for the UK general election have been announced. Despite failing to win a majority, the Conservatives have secured support from the Democratic Unionist Party (DUP) and will remain in power.
This failure to win an overall majority has left many in the pensions industry stuck in limbo over future policies. In its manifesto, the Conservatives confirmed that the state pension age will rise but it did not say how fast or what age it will increase to. They also proposed to maintain the triple lock until 2020, but then to introduce a new ‘double lock’, where pensions will rise in line with earnings or in line with inflation – whichever is the highest.
However, with little support around the double lock there is speculation that the Government would struggle to implement this policy and that it will be dropped.
Jonathan Watts-Lay, Director at WEALTH at work, comments: “There will no doubt be lengthy negotiations ahead, leaving any proposed changes to pension policies stuck in limbo.
“However, employees should not use this as a reason to bury their heads in the sand as whatever changes lie ahead, it’s vital those approaching retirement review how much retirement income they will need, or would like, as early as possible. The value of a well-thought-out plan should not be underestimated.
“Financial education and guidance delivered in the workplace can help individuals set and achieve their financial goals, giving them more control over their finances, and ultimately their retirement plans.
“Once at-retirement, regulated advice should be made available to employees to support better decision making and protect them from costly mistakes, such as paying unnecessary tax or being scammed. Helping employees make the right choices in order to optimise their retirement income should be a priority.”