The Labour Party’s manifesto and its policy suggestions has been described as “ambitious”, “positive”, and “fraught with problems” by industry experts.
The manifesto, which was published today (June 13) covered several different policy areas such as housing, tax, and pensions.
FT Adviser spoke to experts in these areas to get their opinions on what Labour was proposing.
Pensions
One pledge that caught the eye of industry experts was Labour’s upholding of the pensions triple lock.
While Quilter head of retirement policy, Jon Greer, acknowledged that this was unsurprising, he did caution about the effect this policy could have.
“While sensible in terms of winning votes, the continuation of the triple lock is fraught with problems,” he said.
“The triple lock has served to safeguard against poverty for retirees, but it presents a significant fiscal challenge that no party has been willing to fully address.”
He explained the central dilemma is finding a balance between protecting current pensioners and ensuring intergenerational fairness, especially given the UK has an ageing population.
However, Greer displayed more positivity about the manifesto’s lack of mention of the lifetime allowance.
“The pensions industry can breathe a sigh of relief that Labour has failed to even mention the lifetime allowance in its manifesto, indicating it listened to feedback that a reintroduction would have created huge unintended consequences,” he said.
Optimism was also shown by PLSA director of policy and advocacy, Nigel Peaple, identifying another of Labour’s policy, its dedication to a pension review, as worthy of praise.
“It is positive that Labour’s manifesto says if the party is elected, they will undertake a review of the pensions landscape to consider what further steps are needed to improve pension outcomes,” he said.
“We have long argued that automatic enrolment contributions should be increased and that more workers should be included.”
Tax
Hargreaves Lansdown head of personal finance, Sarah Coles looked at the manifesto’s tax proposals, stating: “Labour has pledged that there will be no tax rises for working people.
“They have specifically ruled out rises to income tax, national insurance and VAT. However, both Labour and the Conservatives have said they won’t tackle the misery of frozen tax thresholds. It means whoever is elected, you’re set to pay more tax.”
She pointed out that pay rises will continue to push more people into paying more tax.
She said this has already resulted in 2.1mn more paying income tax and by April 2029, this is set to rise to 3.7mn.
Meanwhile, the number of extra people forced to pay higher rate tax by the policy has hit 1.4mn, and will reach 2.7mn by April 2029.
“Moving tax brackets doesn’t just mean more tax on your income, it also slashes your tax-free savings allowance and pushes you into paying higher rates on everything from capital gains to dividends,” Coles added.
