What does the new government mean for pensions?

Since the EU referendum result on 24 June the face of UK government has changed considerably. In a short space of time, we have had a new Prime Minister, a new Chancellor and a completely new Cabinet.

Very few Ministers have retained their original posts and the pensions industry is getting to grips with a number of new faces.

So what do all these ministerial changes mean for initiatives that are already underway and what impact might they have on the future direction of travel?

shutterstock_107597459Auto enrolment

The new Pensions Minister, Richard Harrington, has re-asserted his commitment to auto enrolment and the 2017 review of auto enrolment looks set to proceed as planned. This is all good news as while auto enrolment is going well, there’s no room for complacency as over a million smaller firms are yet to comply with the legislation. Attention also needs to be given to adequacy of contributions ensuring that those who are auto enrolled have an opportunity to grow meaningful pension pots.

Tax relief

While the outgoing Chancellor backed away from making any sweeping changes to pensions tax relief, question marks remain over whether the new Chancellor, Philip Hammond, will re-open the debate. The Autumn Statement may shed some more light, but so far he’s given no indication as to his thinking. The potential prize is vast but for higher rate taxpayers in particular, it’s a sensitive subject and one he may be tempted to leave alone for the time being.

Pensions Bill

Announced in the Queen’s Speech, the upcoming Pensions Bill will bring much needed protection to savers in master trusts.

While the changes in government have delayed the timetable for this slightly, the expectation is that the bill will be introduced sometime this Autumn.

Lifetime ISA

Another of George Osborne’s initiatives, the fate of the Lifetime ISA remains uncertain. As Treasury resource is inevitably re-deployed to Brexit, other projects are likely be postponed or shelved altogether. Again, the Autumn Statement may shed some light on its chances of survival.

Any change of government brings with it different priorities and focus. But Theresa May’s government has the huge challenge of Brexit negotiations to fit around all the other day to day business of running the country.

While major initiatives such as auto enrolment will proceed undeterred, some of the lower priority or “nice to haves” may well have to step aside. Which ones will make the grade, only time will tell.

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