PensionBee’s response to the Labour Manifesto

Ffion White

by , PR Manager

13 June 2024 /  

June 2024

A hand placing a vote in front of the UK flag

In response to Labours’ pledge to;

Increase investment from pension funds in UK markets to deliver better returns for UK savers and productive investment for UK PLCs

Becky O’Connor, Director of Public Affairs at PensionBee, commented: “Labour echoes the Conservatives’ interest in unlocking pensions to support the UK’s economic growth plans by seeking ways to incentivise pension funds to invest more in the country.

“Reforms could lead to increased investment in alternative assets through pension funds, potentially creating a much larger growth area than it is currently. This could include private equity investments in UK infrastructure. However, without the boost from these reforms and the willingness of pension funds to invest, the outlook for UK alternatives could remain inconsistent, with only isolated pockets of growth.

“Questions, therefore, will remain about whether these investments will deliver the promised returns. The success of these investments will depend on various factors, including the terms of the investment, fees charged, and the long-term success of the underlying businesses. Only then can the hoped-for ‘win-win’ scenario materialise.”

Review the pensions landscape to consider what steps are needed to improve pension outcomes

Becky O’Connor, Director of Public Affairs at PensionBee, commented: “PensionBee research has found a strong consumer desire for a comprehensive review of the pensions and retirement system to take place, with easier consolidation or movement of old pensions identified as key areas for improvement.”

“There has been a concerning rise in transfer times in recent years. To address this, we must move away from self-regulation in the pensions industry and implement a ‘10-day Pension Switch Guarantee’. This timeframe aligns with the independent enforcement already undertaken by the Financial Ombudsman Service. Such a shift is crucial to rebuilding confidence and trust in the pension system, empowering consumers to take charge of their financial future.”

Retain the Triple Lock

Becky O’Connor, Director of Public Affairs at PensionBee, commented: “The pledge by Labour to keep the Triple Lock – while not going as far as the Conservatives with the Triple Lock Plus – is likely to be popular.

“The State Pension is a vital safety net for most retired households and must be preserved at a meaningful level. This is relevant not only for today’s pensioners but also for future generations.

“To preserve the State Pension, some form of index-linking is necessary as without decent and reliable rises to the State Pension, it will be today’s young workers who suffer most when they reach their sixties and seventies, as personal and workplace pension savings are not currently at a level where they could even come close to replacing State Pension benefits.”

Not included in the manifesto:

Reintroducing the Lifetime Allowance

Becky O’Connor, Director of Public Affairs at PensionBee, commented: “Jeremy Hunt blindsided the pension industry by announcing the scrapping of the Lifetime Allowance for pensions, in last year’s Budget.

“This move was widely welcomed, as the threshold had previously been criticised for punishing diligent pension savers who had benefited from investment growth. It’s reassuring to see continuity in this policy, allowing savers to focus on saving for a happy retirement, without concerns about shifting goal posts.”

‘Pot for Life’

Becky O’Connor, Director of Public Affairs at PensionBee, commented: “The reality is people change jobs, pensions get left behind, some are forgotten and retirements suffer so having all of the pensions someone acquires in one place makes sense.

“This concept could be popular and relatively easy to introduce, ultimately allowing people to take greater control of their long-term finances. It’s disappointing that further details on the next steps of this process have not been outlined if Labour secures an election victory.”

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