PLSA comments on Labour manifesto | Pensions and Lifetime Savings Association

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PLSA comments on Labour manifesto

21 November 2019

The Pensions and Lifetime Savings Association (PLSA) has commented on pension pledges in the Labour manifesto.

Nigel Peaple, Director of Policy & Research, PLSA said: 

“The PLSA supports Labour’s manifesto pledges to widen and expand auto-enrolment to low-income and self-employed workers, and to establish a Pensions Commission to recommend target levels for workplace pensions. We are also very strong supporters of the creation of a publically run, non-commercial dashboard, although we are open-minded to others being created in the future provided a comprehensive consumer protection regime is in place.

“According to PLSA research, less than 50% of all savers are on track to achieve an adequate income in retirement, and for those who only have DC pensions, only 3% of savers are likely to achieve this outcome. Just 23% of people are confident they know how much they need to save for retirement, an issue the new PLSA Retirement Living Standards seek to address by starting a national conversation about saving. 

“Our Hitting the Target report (2018) recommended raising minimum automatic enrolment contributions to 12% by 2030 with consideration given to moving to a 50/50 employer/employee split. This will improve pension adequacy and help more people achieve a better income in retirement. 

“More must be done to encourage further saving in workplace pensions, which represent very good value for money for savers versus other types of savings vehicles.”

NATIONALISATION

“We are extremely concerned by the significant negative implications Labour’s plans to nationalise water and energy utilities, train companies, Royal Mail and parts of BT Group could have on the value of UK savers’ pensions and the wider longer-term impact on the private sector’s willingness to invest in the UK infrastructure and economy.

“Nationalisation is a complicated and cumbersome process, and would have a significant impact on UK pension funds and the savers they have a fiduciary duty to serve. 

“If a future Labour Government failed to pay full compensation for any companies it took ownership of, millions of workplace pension savers in the UK could see the value of their pension funds hit directly. Many millions of others are also likely to suffer indirect consequences as a result of any decline in confidence in investing in the UK economy and the impact on gilt markets. In addition, there are significant complexities with valuation, particularly in relation to private and unlisted equities.

“Regardless of the merits or otherwise of re-nationalisation, we have written to shadow chancellor John McDonnell to ask for urgent clarity and assurance to our members and people saving for their pensions that a future Labour Government would pay the full value for any companies it seeks to nationalise and not jeopardise people’s pension savings.”

ENDS

Mark Smith, Senior PR Manager
 020 7601 1726 |  [email protected]k

Steven Kennedy, PR Manager
 020 7601 1737 | 07713 073024 | [email protected]