Aegon says: “Without a one-party majority, compromise will be the watchword.”
The Queen’s Speech will come only days after Guy Oppperman MP was appointed as the new pensions minister, replacing Richard Harrington. Mr Opperman’s ministerial brief now also includes financial inclusion.
Experts believe that tackling pension scams, something with cross-party agreement, is likely to be the only major piece of reform but more clarity is needed in areas such as how much employer-sponsored pension freedom advice is exempt from National Insurance and tax.
Steven Cameron, pensions director at Aegon said: “Without a clear majority, the government is walking on egg shells as it decides how to pursue manifesto policies. Above all else, the legislative timetable for the next two years will be dominated by Brexit negotiations and the Great Repeal Bill, but a weakened hand means key planks of the Conservative manifesto are now less likely to feature.”
This is what he expects to see:
1. Triple lock continuation is now a no-brainer
“The plan to replace the state pension triple-lock with a double-lock from 2020 is not supported by the DUP or by other parties so is unlikely to feature. With a high chance that inflation will remain above 2.5% in the coming years, pursuing a move to a double lock would save the government no money, making it something of a no-brainer to extend its shelf life for at least the next 5 years.”
2. Government unlikely to grasp social care nettle in Queen’s speech
“Conservative proposals for individual contributions towards social care costs went down like a lead balloon with voters, so we don’t expect this nettle to be grasped in the Queen’s speech. An ageing population means social care funding needs to be tackled urgently, but expect further consultations before we get any hard promises from government. We hope the government will aim for cross-party consensus before arriving at a clear, fair and sustainable deal between the individual and the state.”
3. Pension Bill to tackle scams and Defined Benefit issues
“It’s hard to envisage any Queen’s Speech without a Pensions Bill. This year’s should set out protections from pension scams and give the Pension Regulator greater powers to protect individuals’ defined benefit pensions from unscrupulous employers or company failings.”
4. Spring Budget loose ends tied together, including the Money Purchase Annual Allowance
“A new Finance Bill could tie together the long list of loose ends from the Spring Budget dropped from the pre-Election Finance Act. We need clarity on the future level of the Money Purchase Annual Allowance for those who’ve exercised pension freedoms and on the amount of employer-sponsored advice which is exempt from National Insurance and tax.”
5. Reviews of the state pension age and working practices
“The government’s response to the Cridland review of State Pension Age is now long overdue, as is the Taylor review on modern-day working practices, with implications for entitlements to in work benefits such as pensions. Both will generate significant political interest making them candidates for a more consensual approach to policymaking.”