News that the UK could be heading towards a general election this year has prompted growing uncertainty over the long-term direction for pensions policy, with research from PensionBee highlighting particular saver concern around the state pension provision.

PensionBee said that the state pension and triple lock are both in question ahead of a potential general election, as the triple lock has continued to face scrutiny over rising costs, with continued pressure for the government to make changes to keep the cost burden down.

This uncertainty was reflected in the PensionBee Pension Confidence Index, which indicated that faith in the state pension is one of the key factors behind whether people feel confident in their own retirement outlook or not.

Indeed, according to the research, just over one fifth (22 per cent) of people over the age of 55 who feel negatively about their retirement giving the reason: ‘I don’t trust the government to maintain a decent state pension’.”

The Conservatives recently confirmed that it would maintain the guarantee in the short term and Labour has also so far supported maintaining the triple lock.

Yet future promises are less clear, as whilst the Liberal Democrats recently confirmed in their party manifesto that they would opt to maintain the triple lock, Labour and the Conservatives are yet to follow suit.

This is not the only area of disagreement, as PensionBee noted that whilst the Conservatives previously announced plans to abolish the lifetime allowance with effect from April 2024, Labour objected to it and has pledged to reinstate the limit if elected.

Uncertainty in this area has already pushed up demand for retirement advice, as research from Aegon found that nearly half (49 per cent) of firms offering retirement advice have seen an increasing demand for their services as a result of the changes.

The future direction for pension scheme investments seems less in question, however, as PensionBee noted that Labour’s Shadow Chancellor, Rachel Reeves, recently echoed the current government’s interest in unlocking pensions to support UK economic growth plans, so there is unlikely to be much divergence between the parties on the Mansion House reforms, which are designed to seek ways to incentivise pension funds to invest more in the UK.

PensionBee director of public affairs, Becky O’Connor, commented: “Pensions are often subjected to policy changes due to the costs involved to the Treasury of offering tax relief and the state pension, but also because of the votes won or lost through tinkering with people’s retirement prospects.

“The ability for working people to have the opportunity to build a decent pension is a key pillar of a well-functioning society and a healthier, wealthier older population reduces many cost burdens on the state.

“Equally, a recent focus for this government has been making sure older people do not retire too soon and keep contributing to a growing economy for as long as possible.

“For all these reasons, there’s a fair chance that pensions will come up in manifesto commitments. But it’s also worth considering how other possible policies being mooted might indirectly impact people’s pension outlook, such as income or inheritance tax cuts.”

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