What about our pensions? Teesside financial planners set out election challenge

A team of Teesside finance experts have set out the implications for pensions in next week's General Election.

Joslin Rhodes – a Pensions and Retirement Planning firm in Stockton - says the parties are unified in some of their promises, but there are aspects that could change depending on the outcome.

Latest Census data shows that Stockton has an ageing population, with 18.9% of people aged 65 and over, and with Parliament now dissolved, many policy and regulatory initiatives are left hanging in the balance, including the Pension Triple Lock and Pension Taxation. 

On the Triple Lock there is good news for Teessiders as both Conservative and Labour parties have pledged to keep it in place. Introduced by the Conservative-Liberal Democrat Coalition in 2010, the Triple Lock system seeks to ensure that UK State Pension rises each April to ensure their value cannot be overtaken by increases in the cost of living, or the income received by those of working age.

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But there have been concerns around the freezing of income tax thresholds pushing people into higher tax bands, and the Office for Budget Responsibility (OBR) prediction that by 2027 the UK State Pension will be higher than the tax-free personal allowance.

The Conservative Party has proposed a new scheme called ‘Triple Lock Plus’ which  aims to ensure that the State Pension always stays below the tax-free threshold, which would need to rise accordingly.

Despite initial reports, the Labour Party manifesto did not contain plans to reintroduce the ‘Lifetime Allowance’, which was abolished by the current Conservative Government in April this year, and there were no further commitments made to tax relief or allowances.

Neither party included any proposed changes to the pension age within their manifesto, but the next Government will likely need to make some unpopular decisions here in response to calls to raise the age more quickly to save the Treasury money.

Neil Parker, Founder and CEO of Joslin Rhodes said: “Any change of Government brings unforeseen changes to the economy, interest rates and other policies relating to tax and savings, and it’s natural for people to be concerned about the uncertainty.

“We’d recommend that Teessiders be aware of the changes, but not alarmed. Instead, they should take this opportunity to take stock of their current retirement and pension plans - the best laid financial plans are those that are built for the long-term and designed to handle short-term market fluctuations.”