Adviser > News > May 2010 > Post-election pensions
Post-election pensions
Now that the excitement of the 2010 General Election is over, what does the future hold for retirement planning?
Now that we know who'll be running the country, we have some idea of what the new coalition Government has in store for us, pensions-wise.
Who's who
In case you missed it, Iain Duncan Smith is the new Secretary for Work and Pensions and Steve Webb is one of the Lib Dems who got a ministerial role as Pensions Minister.
Proposed plans
Here's an update on what we know so far from 'The Coalition: our programme for government' issued on 20 May 2010 and what the future may hold after the emergency budget due on 22 June 2010:
| Default retirement age (65) |
|---|
| Will be phased out, meaning that employers can no longer 'force' employees out of employment at age 65 |
| Basic State Pension | |
|---|---|
| Re-linking to earnings | Yes, from April 2011, in the form of a 'triple guarantee' that pensions will be raised by the higher of earnings, prices or 2.5%. |
| State pension age | A review will be held to set the date that State Pension Age starts to rise to age 66, although this will be no earlier than 2016 for men and 2020 for women. |
| Auto enrolment and NEST |
|---|
| Commitment to simplify rules and regulations to reinvigorate occupational pensions and work with stakeholders to support auto-enrolment. On NEST, David Laws, the Chief Secretary to the Treasury is reported* to have said that the contract to run NEST, worth some £600 million and signed by Tata Consultancy Services, will be reviewed. |
| Tax relief on pension payments |
|---|
| No specific news on this yet although it is understood that there may be a policy conflict as the Lib Dems want to scrap all higher rate tax relief while the Conservatives may not have the appetite to do so. |
| Flexibility in pensions | |
|---|---|
| Age 75 rule | The plan is to scrap the age 75 rule and so that individuals are not forced to annuitise at that age. |
| Early Access | The option to allow greater flexibility in accessing pension saving early will be explored. |
| Public Sector Pensions |
|---|
| An independent commission will be set up to look at the long term affordability of public sector pensions whilst protecting accrued rights. |
So far, this is all that has been confirmed although we do expect further details when the emergency budget takes place, particularly around the higher rate tax relief issue.
Source:
* NEST admin contract to be 're-examined' - UPDATED, Professional Pensions online, 17 May 2010.
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