At 7am on Thursday 7 May 2015, polling stations across the UK will open. They will close 15 hours later and the British public will have had their say. It may take a lot longer, however, until we understand exactly what they have said.
This year's general election is set to produce the most equivocal results in living memory. If current polls translate into political reality:
- the House of Commons will have MPs representing up to ten parties;
- neither the Conservatives nor Labour will be close to commanding a majority; and
- forming a government will be difficult and is likely to require coalition building.
All the parties have plenty to say about pensions and an ageing society. In past elections, we've focused attention on the Conservative and Labour employment policies. This time, parties as diverse as UKIP, the Greens, the SNP and DUP may be key actors in forming a coalition.
To reflect the rising importance of the smaller parties, we've ploughed through ten manifestos to see what the parties are offering for employers, savers and pensioners. There are some consistent themes and some important differences.
We've outlined some of the key issues in this alert. We've also set out comprehensive coverage of the policies affecting employment and pensions in our manifesto guide.
Consensus on pensions
One of the most welcome aspects of the manifestos is the extent to which key policies have cross-party support.
The pensions industry has had to do a huge amount of work to deal with the implementation of workplace pension reform and this year's pension reforms on flexible access to pension savings.
Most will welcome a consensus that will give the new system time to become established before further reforms are considered.
6 April 2015 was a milestone day for wide-reaching pension reforms. The reforms represent the biggest challenge to the pensions industry since A Day.
At the heart of the changes is a new regime designed to offer savers in defined contribution (DC) pension schemes flexible access to their pension savings. These reforms were accompanied by changes to the DC governance and charges regime.
It has been a challenging year for the pensions industry as they have attempted to get to grips with the reforms. There will be widespread relief that this effort will not be wasted as all the main parties are committed to the reforms.
In addition, the main parties remain committed to seeing through the implementation of workplace pension reform (automatic enrolment). By 2018, all UK employers will be subject to employer duties under this regime and it is likely that the next government will review the policy at this stage.
Protection for savers
While there is broad support for the principle of flexible access to DC savings, several parties express reservations about the dangers of scams, mis-selling and a lack of quality advice.
Irrespective of who forms the next government, it is likely there will be another look at the regulation of pension schemes. This will be accompanied by a review of the Pension Wise service and the success (and any failings) of the guidance guarantee.
Cash-strapped governments have tinkered with tax relief for pension savings since the start of the financial crisis. There is no sign that this will let up in the coming parliament.
The Conservatives are committed to reducing tax relief for people earning more than £150,000. The Liberal Democrats want to look at introducing a single flat rate of tax relief. This would be more generous for basic rate tax payers but would see higher rate tax payers lose out on a portion of their current tax relief.
Plaid Cymru and the SNP want to review the 40% rate of tax relief for higher earners. It is likely that this would culminate in the reduction or abolition of this higher rate of tax relief. The Greens promise to go the furthest by removing one-half of the current amount of tax relief for private pension savings.
State pensions are a vital component of manifesto commitments on pensions. They also have an impact on the private sector pension system. A single-tier state pension means the end of contracting-out in defined benefit schemes, for example.
The parties are committed to preserving the 'triple lock', whereby state pensions increase by the higher of 2.5%, CPI and the increase in average earnings. The Greens, SNP and Plaid Cymru go further by pledging an increase to state pensions to try and end pensioner poverty.
You can see the full details of what each of the parties is promising on pensions, and compare these commitments, in our comprehensive employment and pensions manifesto commitments table.