Queen's Speech & your financial planning

Regrettably, the Queen’s Speech was neither long nor detailed on a number of issues that have been hanging around for some time. With the Government struggling to command a majority, various manifesto and previous pledges have either been dropped or remain uncertain.

When the election was called, we highlighted three planned pieces of legislation which would, at the least, be delayed, namely:

The Queen’s Speech on June 21st has left us in the dark on all three issues. So for the time being we recommend that:

  • Clients should not venture above the proposed £4,000 ceiling on Money Purchase Annual Allowance where their pensions have already been accessed to some extent.

  • Employers should not assume that the proposed increase in the annual pensions advice allowance to £500 per employee per tax year will go ahead and be backdated to April 2017. In itself, it is not an issue likely to invite parliamentary opposition, but the legislation simply isn’t in place yet and may not be backdated if and when it’s enacted.

Proposals concerning future state pension age increases were due to be published by the DWP in May, following a year-long review. Again, the Speech was silent on the topic and the issue is certain to be hotly debated if changes are put forward, so don’t expect anything controversial for now.

On other matters, The Speech made no mention of the Conservative manifesto plans to abandon the so-called triple lock state pensions guarantee. The Tories proposed moving to a double lock, removing the annual minimum increase of 2.5%. Ironically, with inflation running at 2.9%, the fiscal imperative for eliminating the 2.5% minimum has gone away – for the time being at least. And given the opposition parties were committed to retaining the triple lock in their manifestos, it’s been an easy one for Number Ten to ignore.

In the end, all of this leaves us in an uncertain world, with the uncertainty surrounding Brexit negotiations, and the ability of the Conservatives to govern effectively, dominating the political agenda for the foreseeable future.

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