A double, not triple, lock; a tough stance on corporate failures around pensions - but plenty of questions still to be answered

The Conservatives’ manifesto looks to be tough on state pensions, tough on errant businesses - and completely silent on pension tax reform. But there’s still plenty of missing detail.


The Conservatives are the only party that will not retain the state pension triple lock beyond 2020. Instead, they would introduce a ‘double lock’ of the higher of inflation or earnings growth – but remove the commitment to a minimum 2.5% increase. Winter fuel allowances would become means-tested.

Malcolm McLean, senior partner at Barnett Waddingham, praised the Conservatives for having “grasped the nettle here and replaced, what was always intended to be a temporary arrangement, with what will hopefully be a more stable basis for annual uprating in the future.” However, TUC general secretary Frances O’Grady slammed the proposal, describing it as a “bad call”. She said: “The triple lock was meant to restore the state pension after it spent decades falling behind wages. That job isn’t finished.”


Like Labour, the Conservatives have taken heed from the collapse of BHS and the huge knock-on effect on its pension scheme. The Pensions Regulator will have new powers to apply ‘punitive’ fines if companies have ‘wilfully left a pension scheme under-resourced’. There will also be a new criminal offence for company directors who ‘deliberately or recklessly put at risk’ a pension scheme and its ability to meet obligations to pensioners.

The party has reiterated its commitment to pensions auto-enrolment, and its intention to extend it to the self-employed. McLean praised the latter, saying “this is long overdue with all the evidence pointing to a continuing reduction in pension saving by the self-employed”.

Conservatives will also ’promote long-term savings and pensions products, including the Lifetime ISA (LISA)’. Darren Philp, director of policy and market engagement at The People’s Pension said that commitment to the LISA needed to be “approached with caution”. Although anything that encourages saving is a “step in the right direction,” said Philp, using a LISA instead of a pension to save for retirement “means people risk missing out on valuable employer contributions in a workplace pension.”

While not directly pensions-business, the manifesto’s controversial proposals for funding social care, quickly dubbed the ‘Dementia Tax’, will inevitably link to pensions and retirement savings. “The decision certainly seems to indicate a move to greater self-reliance,” said Richard Parkin, head of pensions policy at Fidelity International. But he warned of any number of “bear traps” in the detail: “How will government treat equity release debts in calculating value and how will unused pension pots be counted? Without a coherent policy there will be plenty of scope for arbitrage of the rules by the wealthy.”


“Like Labour, the Tory manifesto is silent on any radical reform of pension tax relief although it does talk about promoting and incentivising long-term savings,” said Parkin. However, Philp, believes that pensions tax relief will be a priority, no matter who wins. “I have no doubt that this will be looked at again whatever party ends up forming the next government,” he said.