Peers call for policy rebalance in favour of the young
On 25 April 2019 the House of Lords’ Committee on Intergenerational Fairness and Provision called on the Government to take steps to deliver a fairer society by supporting younger people in the housing and employment market, and to deliver better in-work training and lifelong learning “to prepare the country for the coming 100-year lifespan”.
And as part of this policy rebalancing, the Committee called for four measures to be enacted that would impact older people:
- The removal of the triple lock for State Pensions, with uprating in future being in line with average earnings (albeit with some form of protection should there be periods of high price inflation in the future)
- Phasing out free TV licences based on age, with the Government to decide if it wants to provide a subsidy based on household income
- Free bus passes and Winter Fuel Payment only being available five years after a person becomes eligible for the State Pension – to be introduced when State Pension Age rises to 67
- Better off workers over State Pension age to pay national insurance while they continue to work
The report also recommends a complete review of the inheritance tax regime, calling it “not currently fit for purpose”.
Comment
We have heard this all before, but there is no harm in it being said again. However, there is next to no chance of this Government acting on any of the points listed above, this side of a General Election. Nevertheless, the Government is required to respond to this Select Committee’s recommendations, so we shall wait and see.
Bridging pensions above 65 to no longer fall foul of age discrimination law
An Order has been laid before Parliament whose purpose is to ensure that pension schemes providing temporary pensions that bridge the period from the member’s normal retirement age to their state pension age don’t fall foul of age discrimination law by virtue of State Pension age rising above 65 (which it did last December). This follows a short consultation in January (see Pensions Bulletin 2019/03) on which the DWP has now published a response.
Comment
The Equality Act (Age Exceptions for Pension Schemes) (Amendment) Order 2019 (SI 2019/879) is virtually identical to the draft Order put out for consultation. It comes into force on 15 May 2019. Whilst a useful piece of legislative housekeeping, it really ought to have been implemented sooner as the DWP cannot easily backdate the legislation. However, schemes that have been bridging beyond 65 since last December are unlikely to have received any complaints.
Termination awards above £30,000 to attract employer NIC charge
A short Bill has had its second reading in Parliament that will apply employer national insurance contributions to termination awards that exceed £30,000 and income from sporting testimonials over £100,000. Such payments already attract income tax and so the purpose of the Bill is to bring the NIC treatment into alignment.
Comment
The National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill 2017-19 is expected to be a non-controversial addition to the statute book. Its provisions are intended to operate from 6 April 2020.
British Steel – Pensions Regulator publishes its action plan
The Pensions Regulator has published a table of the actions that it and others are taking, along with timelines, in relation to the recommendations arising from the Rookes report on the communications and support provided to members of the British Steel Pension Scheme (see Pensions Bulletin 2019/03).
So far the actions taken appear to be one of liaison and discussion between regulators and Government departments, along with some initial and as yet unpublished work, but there is a promise to publish guidance material covering a number of topics with the “first phase of web hub release” being in September.
Hammond signals delay in response on RPI failings
The Government’s response to the House of Lords’ Economic Affairs Committee’s strong criticisms of the current calculations underlying the Retail Prices Index seems to be delayed, perhaps significantly. This seems to be the clear indication from a quick note sent to the Chair of that Committee by the Chancellor on 30 April 2019.
The Committee had signalled the need for clear action to be taken in its January report (see Pensions Bulletin 2019/03) and a response from the Government was expected in April, but it now seems that there is no firm date by when we can expect anything of substance on this topic from the Government.
Comment
This was always a hot potato for the Chancellor. It is not clear whether the subject matter or the Government’s Brexit paralysis has been the cause for the delay. Perhaps it’s a bit of both. For our latest take on the inflation measurement debate see LCP partner Alex Waite’s blog.
