Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
This election has seen an unprecedented focus on policies aimed squarely at pensioners, with all parties keen to bolster support ahead of polling day on 12th December.
Pensions are arguably the big story of the Labour campaign, with the party committing £58 billion in compensation to the WASPI women and freezing proposed increases in the state pension age beyond 66. This latter proposal could end up costing £24 billion a year by the 2050s, with no clear indication of where the money for either promise will come from.
Not to be outdone, the Conservatives followed with some more modest handouts to the retired population, including maintaining the state pension triple-lock, winter fuel payment and free bus passes.
For those in work, the Tories have pledged to increase the National Insurance threshold to £9,500, while Labour is mounting an attack on higher earners by bringing the 45p threshold down to £80,000 and creating a new 50p rate for those earning above £125,000. Those earning through dividends or realising capital gains would also be hit by a Corbyn Government.
While many will already know who they are going to vote for, millions will be still be undecided. For many, the impact any promises might have on their personal finances could sway them one way or another.
General Election 2019: Manifesto promises summary
The table below shows a snapshot comparison of the main political parties’ manifesto - and other - pledges on key financial and long-term savings area. If you would like more information on what these pledges will mean for savers and investors in the UK, please get in touch.
| Labour | Liberal Democrats | Conservatives | SNP | |
|---|---|---|---|---|
| State benefits | ||||
| State pension | Maintain triple lock. Uprate state pension for British pensioners overseas | Maintain triple lock | Maintain triple lock | Maintain triple lock |
| Pensioner benefits | Maintain winter fuel payment and bus pass. Free TV licenses for over 75s |
No mention | Maintain winter fuel payment and bus pass. Believe free TV licenses for over 75s should be funded by the BBC |
Demand government re-instates the free TV license for over 75s |
| WASPI | Promise to compensate WASPI by an estimated £58bn paid out over five years.* | Ensure properly compensated – in line with recommendations of the parliamentary ombudsman | No mention | Continue to ‘stand up’ for WASPI women. |
| State Pension Age | Abandon plans to raise SPA, leaving it at 66. Review retirement ages for physically arduous and stressful occupations, including shift workers in public and private sector |
No mention | No mention | Oppose plan to increase SPA to 68 by 2038 |
| Pension Credit | Restore pension credit for couples where partner is of working age | No mention | No mention | Restore pension credit for couples where partner is of working age & create a pension credit awareness & take-up campaign |
| Taxation | ||||
| Income tax | Cut additional rate of tax threshold from £150,000 to £80,000. Introduce new 50% rate for those earning more than £125,000 | 1p increase in income tax ring-fenced for NHS and social care | Not raise income tax or VAT | No additional comments on Income Tax. Support the reform of VAT |
| National Insurance | Freezing NI for those earning under £80,000. No mention of over £80,000 implications | Review the NI status of employees, dependent contractors & freelancers | Raise NI threshold to £9,500 in 2020/21 | NI rate & thresholds will fit devolved income tax rates |
| Capital gains tax | Cut the capital gains allowance and tax gains as income | Remove the capital gains allowance and tax gains as income | No mention | No mention |
| Dividend tax | Remove dividend tax-free allowance subject to a de minimus of £1,000 and tax dividends as income | No mention | No mention | No mention |
| Inheritance tax | Remove the residence nil rate band | No mention | No mention | No mention |
| Marriage allowance | Scrap it | Scrap it | No mention | No mention |
| Pension tax rules | ||||
| NHS pensions | Listen and act on the pension crisis that is driving away our most experienced clinicians | Within first 30 days, hold an urgent tax review to ‘solve the taper problem’ | No mention | |
| Tax relief on pensions | Abolish employee NI payments on pension contributions 1 | Review ‘net pay’ tax relief rules for low earners | No mention | |
| Access to Pension saving | ||||
| Self employed | Better access to mortgage and pension schemes. | Review pension rules so those in the gig economy don’t lose out and portability between roles is protected | Comment on improving access to finance and credit – but nothing on pensions specifically | Included in auto-enrolment |
| Automatic enrolment | Stop people being auto-enrolled into ‘rip-off schemes’ and seek to widen and expand access for more low-income and self-employed workers | No mention | A review on net pay rules for low earners | Extend auto-enrolment, so that more low paid and self-employed workers can benefit from regular pension savings |
| Pension contribution levels | No mention | No mention | No mention | Legislate to align executive pension contributions to all staff |
| Independent pensions commission | Establish a commission to recommend target levels for workplace pensions | No mention | No mention | Support the establishment of an Independent Savings and Pension Commission to ensure pensions and savings policies are fit for purpose and reflect the demographic needs of different parts of the UK |
| Pensions dashboard | Develop a single dashboard | No mention | Reintroduce legislation to create [multiple] pension dashboards | No mention |
| Defined ambition | Legislate to allow CWU-Royal Mail agreement and allow similar schemes | No mention | Reintroduce legislation to create a new type of pension scheme | No mention |
| TPR powers | No mention | No mention | Reintroduce legislation to increase TPR power | No mention |
| Same sex inequalities | No mention | Address continuing inequalities in pensions law for those in same-sex relationships | No mention | No mention |
| Pension funds | ||||
| Climate change | No mention | Require pension funds to show their portfolio investments are consistent with the Paris Agreement, new powers for regulators to act if not managing climate risks properly | Unlock long-term capital in pension funds to invest in and commercialise our scientific discoveries. | SNP support moves to introduce an easy to understand system of climate-friendly external auditing of firms, so that investors can better understand the climate related risks of investments, including employee pension schemes. |
| Social care | ||||
| Social care | Fund free personal care for older people and extra care packages | An additional 1p in income tax rates ring-fenced for NHS and social care | Build a cross party consensus to consider a range of options. Promise no-one should have to sell their home to meet care costs. | Fund free personal care for all that need it** |
*Labour party announcement Sunday 24 November
**Not in manifesto: https://www.snp.org/policies/pb-how-is-the-snp-improving-social-care-services/
These articles are for information purposes only and are not a personal recommendation or advice.
Written by:
Tom Selby
Director of Public Policy
Tom Selby is AJ Bell's Director of Public Policy. He joined the company in 2016 as a Senior Analyst before becoming Head of Retirement Policy. He has a degree in Economics from Newcastle University.
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