“My Government will continue with its long-term plan to provide economic stability and security at every stage of life,” said the Queen in her speech marking the opening of parliament. But what does it mean for pensions? Sara Benwell explores

Protection of the ‘triple-lock’, welfare reform and a commitment to an EU referendum, were among the key pieces of legislation likely to affect pensions. They were unveiled in a Queen’s Speech that covered everything from psychoactive drugs to the UK’s position on the ongoing conflict in Syria.


Unsurprisingly, the first Conservative Queen’s speech in almost two decades included a strong commitment to the long-term economic plan, signalling that we can expect more of the same when it comes to deficit reduction plans.

While pensions were only briefly mentioned during the speech itself, the accompanying legislation briefing pack suggests that there are a number of proposed changes that will have implications for the industry:

State pension


Measures will also be brought forward to secure the real value of the basic State Pension, so that more people live in dignity and security in retirement.”







The government pledged that it would protect the triple-lock in its manifesto, pledging to increase the basic state pension by the higher of inflation, earnings or 2.5% a year up to 2020.


The document states:

  • The Government is continuing to put pensioners at the heart of the long-term economic plan as the country recovers. As part of this commitment the triple lock will continue to apply to the basic State Pension for the duration of the Parliament.
  • This will ensure that pensioners who have worked hard and made a contribution during their working lives have their incomes protected.
  • Continuing the triple lock will give pensioners the financial security and certainty that they deserve and ensure pensioners see adequate increases in the basic State Pension.
  • In addition the Government will continue to protect other pensioner benefits, including Winter Fuel Payments, free bus passes, TV licences, and free prescriptions.


However Aegon’s regulatory strategy manager, Kate Smith argues that more clarity is needed as to whether the ‘triple lock’ will apply to the new single tier pension from 2016.

“Enshrining in law, for the next five years, the triple lock increases to the Basic State Pension will be a popular move for existing pensioners. But tomorrow’s pensioners need clarity now on whether the triple lock applies to the new single tier pension from April 2016.

“Remember that not everyone will get the full single tier pension due to complicated transitional arrangements. People need certainty now, so they can plan ahead and live in dignity and security in retirement. They need to be told as a matter of course how much state pension they will receive, rather than waiting until their 55th birthday. This information is also essential before deciding how to use the new pension freedoms.”

EU referendum


Early legislation will be introduced to provide for an in-out referendum on membership of the European Union before the end of 2017.”







The Conservatives have followed through on the promise to give UK voters a voice on the future of the country’s relationship with Europe.


The purpose of the Bill is to:

  • Give the British people a voice and a real choice on Europe.
  • Enable a referendum to allow the electorate to have an in-out vote on the UK’s membership of the European Union (EU) before the end of 2017


In the run up to this referendum we can expect the UK to negotiate reforms to the existing arrangement. How successful and wide-reaching these negotiations are will likely influence the outcome of the referendum.

My Government will renegotiate the United Kingdom’s relationship with the European Union and pursue reform of the European Union for the benefit of all Member States. 







What the UK decides will have significant impact on investments, argues Nick Salter, president of the Institute and Faculty of Actuaries (IFoA):

“Whether the UK decides to remain part of, or leave, the EU could have a significant impact on pensions, insurance and investment. It is important that the impacts on businesses and members of the public, in terms of regulation and financial products are properly understood and debated so that informed decisions can be taken by the electorate, something that is all too often missing.”



My Government will also bring forward legislation to secure a strong and lasting constitutional settlement, devolving wide-ranging powers to Scotland.”







One of the major implications of the referendum was that the Conservative government pledged more devolved powers to Scotland.

In the Queen’s speech legislation the Conservatives promised to: “honour the commitment made to the Scottish people before last year’s independence referendum to transfer significant new powers to the Scottish Parliament, making it one of the most powerful devolved parliaments in the world.”

The document states that some of the main benefits of the Bill would be:

  • Along with a more powerful and accountable Scottish Parliament, Scotland would also retain the huge benefits of being part of a strong United Kingdom with a large UK economy, a UK pound, UK pensions and UK armed forces – just as the Scottish people made clear they wanted in last year’s independence referendum.
  • The Bill would give the Scottish Parliament the power to set the rules over a range of benefits which affect carers, disabled people, the elderly and to control programmes which help people find work.


It is not yet clear whether the Scots will be given any devolved powers over pensions. The wording suggests that the nation will still have “UK pensions”, but more powers over benefits affecting the elderly suggests that there may be some leeway.

With the second budget of 2015 booked in for the 8th July, the pensions industry will be waiting for more details on both Scottish devolution and the EU referendum to try and understand what the implications for pensions might be.

We will also be expecting more clarity on the future of pensions freedoms including the possible resale of annuities.