The pensions industry has welcomed the level of pensions continuity in the Conservative’s 2024 manifesto, despite disappointment at the lack of commitment around broader pension policies, such as auto-enrolment reforms and the potential for a pot for life model.

The Conservative manifesto, published yesterday (11 June), provided further detail on its plans to introduce a new ‘triple lock plus’, as well as its new pensions tax guarantee, which includes a commitment to maintain the 25 per cent tax-free lump sum.

Pensions and Lifetime Savings Association (PLSA) director of policy and advocacy, Nigel Peaple, said that the manifesto on pensions was “generally in keeping with their current policies and recent statements although they have added new commitments on a number of specific pension allowances and to old age benefits”.

However, Peaple, noted that “we are yet to see any of the political parties commit to addressing the chronic under-saving problem that will lead to more than 50 per cent of savers falling short of the retirement income targets set by the 2005 independent Pensions Commission”.

“We urgently need a roadmap to gradually increase pension contribution levels from 8 per cent to 12 per cent over the next decade or else many people working today will miss out on a better pension in retirement," he said.

This was echoed by Pensions Management Institute (PMI) director of policy and external affairs, Tim Middleton, who expressed frustration that there was little new announced concerning those who are currently still in work.

“It would have been encouraging, for example, to have included further reforms to auto enrolment,” he said. “It is also a little surprising that there was no mention of the lifetime provider."

PensionBee director of public affairs, Becky O’Connor, agreed, arguing that the “Conservatives have recognised the clear potential in the benefits of people having a lifetime pension provider so they don’t lose old, valuable pensions as they move from employer to employer”.

“This concept could be popular and relatively easy to introduce, ultimately allowing people to take greater control of their long-term finances, so it’s disappointing that further details on the next steps of this process were not outlined,” she stated.

However, a number of the pension measures included in the manifesto, particularly the triple lock plus, are expected to appeal to older voters, and Aegon pensions director, Steven Cameron, noted that “pensions and pensioners are central to this year’s general election campaigning, as the ‘grey vote’ holds significant importance”.

Selby agreed, acknowledging that “older voters continue to hold the keys to Downing Street, so we should perhaps not be surprised that Sunak has moved to super-charge the triple-lock to win them over”.

“However, there is a serious generational divide when it comes to the policy*, with older people attracted to the pledge and younger voters much less keen,” he added.

“This likely reflects the vested interests of both cohorts, with those in receipt of the state pension keen to keep bolstering their incomes, while younger people are perhaps fearful of the impact hiking the state pension today could have on their future state pension entitlement or other areas of public spending.

"While committing to the triple-lock was the easy choice for both major parties politically, the demographic timebomb hitting the UK means at some point the next government will need to address the fundamental questions of what the state pension should be worth and when people should receive it.”

Commenting on the manifesto more broadly, Selby also argued that while the pensions tax guarantee is welcome news, “it is important to take this pledge with a pinch of salt”.

“The 25 per cent tax-free lump sum is now capped at £268,275, and failing to increase this amount will effectively mean tax-free cash is steadily eroded by inflation,” he said. “What’s more, the Conservatives haven’t ruled out making tweaks to the existing allowances.”

However, he admitted that this commitment is a step in the right direction and would “at least give savers some confidence that the rules will not constantly be changed”.

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