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Green Party manifesto comment: Some pension policies amount to robbing Peter to pay Paul

19/11/2019

If you are covering the Green Party manifesto published today, please see the following commentary from Quilter’s head of retirement policy, Jon Greer:

Jon Greer"Pensions are often a very contentious part of any election campaign and can massively influence those who are most likely to vote in force. The Green Party’s manifesto pledges regarding pensions are unsurprising in some respects such as their pledge to require public bodies to divest their pension funds away from fossil fuel related investments.

"However, the Green Party has also pledged to give pensioners £10 more per week under their overhauled Universal Basic Income system, as opposed to the current state pension system, with the increase linked to inflation.

"A fairer policy would be to base pensioners income increases on the average earnings increase in the UK. This would mean that pensioner income would be linked to the prosperity of the rest of society rather than simply inflation.

"The Party’s focus on fixing the cracks in the gig economy is laudable as we need to make sure that any policies make clear exactly who is an employee and who is genuinely self-employed. The consequences of failing to classify gig-economy workers clearly means that many do not know their rights, for example whether they are eligible to be auto-enrolled into pensions.

"Since people are now put in control of their own retirement savings more than ever before, saving into a retirement pot should continue to be incentivised through tax relief. The pledge to reduce the current rates of tax relief to the basic rate and limit the amount of tax free cash you can access from your pension could end up being detrimental to the savings habits of millions of people, and will be unpalatable to many voters.

"As ever, there is an element of robbing Peter to pay Paul in these pension policies. While the Greens state they would help pensioners by ending the double taxation of pension funds, effectively reversing Gordon Brown’s tax raid on pension funds, they controversially pledge to cap tax-free cash from pension funds at £40,000. This would mean people with funds in excess of £160,000 would not have any tax free cash allowance in their fund"

For more information contact

Tim Skelton-Smith02380 916 99807824 145 076tim.skelton-smith@quilter.com
Alex Berry023 8072 626007741 151931alex.berry@quilter.com

Notes to Editors:

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