Fantastic news that today’s Conservative Manifesto includes a commitment to look at the pensions net pay anomaly. I hope all other parties will now make the same commitment. pic.twitter.com/4MUXrwlDCE

— Adrian Boulding (@AdrianBoulding) November 24, 2019

Adrian , along with Ros Altmann and the Low Income Tax Group have led a campaign over the past two years to get the net pay anomaly onto the political agenda – and sorted.

The 2019 Conservative Manifesto includes the following promise

A number of workers, disproportionately women, who earn between £10,000 and £12,500 have been missing out on pension benefits because of a loophole affecting people with net pay pension schemes. We will conduct a comprehensive review to look at how to fix this issue.

The cost of putting right the issue does not appear in the costings document that accompanies the Manifesto – we are still a long way from resolution but the LITG has put forward a comprehensive fix which the Treasury has seen. The cost of re-coding PAYE to implement the fix is quoted in a recent document produced by the Office of Tax Simplification as only £10m. The issue is how complete restitution should be.

Parallels with Labour’s WASPI restitution statement

In as much as the net pay anomaly mainly impacts women, has arisen by stealth and it impact has yet to be fully felt, there are parallels with the WASPI claims for restitution or compensation for lost pension.

But these parallels are superficial. The cost of auto-enrolment into workplace pensions is 25% higher for those earning less than £12,500 than for those on higher incomes. It is a problem that focusses on low earners.

WASPI is a movement of women accross all social and wealth divides and the £58bn bung (working out at £15,380 per women).

It is ironic that it is the Labour Party which seeks to redistribute a huge sum (which will come out of other budgets) to reward mature women who their Government had the responsibility to educate. Many of these people are well off and would not otherwise be Labour voters. They have been let down once by Labour and should be reminded of the import of this tweet

The 2004 report concluded the Labour Govt should take steps to raise awareness about the increase in SPA from 60 to 65 for “Women without private pensions and who are not in work”.

The report was in 2004 and the change came into effect from 2010.

— Josephine Cumbo (@JosephineCumbo) November 24, 2019

Prevention is better than cure

The Labour Party has said nothing about fixing the injustice to the  1.7m low-earners, before the problem reaches WASPI proportion. Fixing problems retrospectively is a lot more expensive than in their early stages, prevention is better than cure.

The next Conservative Government (if that’s what turns out) are now formally committed to curing the problems they created when introducing the Pensions annual allowance and the taper that can result in doctors paying tax at up to 100% of income.

#ToryManifesto pledges to hold an “urgent review” into the #NHS pensions taper problem, causing widespread issues across the doctor workforce. Govt is ALREADY reviewing the taper. This was announced in August. https://t.co/JdLuIQ2BFF pic.twitter.com/aJEUFTJs0v

— Josephine Cumbo (@JosephineCumbo) November 24, 2019

But the Conservative party manifesto stops short of returning to the 2015-16 consultation on pension taxation which could have prevented the problem in the first place.

The Conservative party should learn from the past, that problems like the net pay anomaly and the AA taper result from the complexity of the UK pension taxation system and till this is overhauled – we will continue to get pension crisis’ as we have in the NHS right now.

What else?

There really is not much else to the Conservative Manifesto that might be considered “new” in terms of pension policy.

The mantra  is repeated

On entering Government in 2010, the Conservatives acted decisively to protect the UK’s pensioners. The ‘triple lock’ we introduced has meant that those who have worked hard and put in for decades can be confident that the state will be there to support them when they need it.

We will keep the triple lock, the winter fuel payment, the older person’s bus pass and other pensioner benefits, ensuring that older people have the security and dignity they deserve. We recognise the value of free TV licences for over-75s and believe they should be funded by the BBC

The Pensions Bill 2019 will return in 2020.

“We will reintroduce legislation that protects pension pots from being plundered by reckless bosses, helps savers be better informed with pension dashboards, and creates a new style of pension scheme which is more sustainable for workers and employers.”

There is a statement of intent with regards permissable investments by pension funds

We will unlock long-term capital in pension funds to invest in and commercialise our scientific discoveries, creating a vibrant science-based economy post-Brexit.

I am not sure this vague statement is helpful.

Unlock is deliberately vague, but I take it to mean either “bully pension schemes into investing how government tells them”, or “reduce member protections on charge levels and massively enrich rip-off VC managers, with the merest tiny dribble of cash eventually finding its way to the real economy”.

But let that be – the intent of the majority of the manifesto – at least on pensions – is good.

What’s missing?

A coherent policy on long-term care looks as far away as ever. The new idea is to get cross-party consensus about what should be done. Let’s hope that after the B word passes into history we can “Get elderly care done”.

There is, as has already been said, no radical idea for pension tax-reform or a commitment to revisit the 2015-16 consultation.

Nor is there anything much for the ordinary pension saver. Plans to revise AE contribution rates seem very much on the back-burner (though the changes to National Insurance thresholds and the proposed increase in the living wage, means that many lower earners may feel ready to save more (especially if they get the promised “incentives” for saving).

Let’s hope that industry pressure to ensure that workplace pensions deliver on their promise, makes the proposals of the 2017 AE review a reality.

Let’s hope that the proposals of the Taylor review towards the self-employed (especially the new self-employed of the gig economy) get implemented.

And let’s hope that the key policies in the Pensions Gill – mandating schemes to provide data to the pensions dashboard and the facilitation of CDC schemes – make it onto the statute book.

In conclusion – how do the parties stack up on pensions

From a pensions perspective, the Conservative party is much the best party to vote for. I won’t be voting for them this year for other reasons  but that is another matter.

The Labour party’s manifesto – and subsequent announcements on WASPI are shambolic and would be disastrous if implemented.

The Liberal party has decided not to have a pension policy and indeed don’t seem to have a potential pensions minister if they had.

There are Green and SNP manifestos and I haven’t probed them on pensions. But – the betting being firmly on a Conservative Government or a Conservative led coalition, I am as comfortable as I can be , that the Conservative manifesto is broadly in the right place.