Election

It's often said that the one thing investors hate is uncertainty, because they can't properly evaluate the pros and cons of a transaction while all is in flux. The same can be said of those of us in financial planning. We dislike uncertainty because we need the most stable framework possible to allow us to plan ahead for our clients.

Therefore, the election of a Conservative government will see the continuation of the new pensions rules, which allow savers to pass money onto whoever they see fit when they die, and also allows them to dig into their funds as and when they want, rather than being tied into rigid spending limits set by the authorities.

In some ways it will be easier for the government to stick to this philosophy now that it is a single-party administration rather than one relying on two groups of politicians, where any progress in this area might end up being bargained away in the inevitable horse-trading that accompanies coalition politics.

Ros Altman's appointment as a new Minister means we have a serious pensions expert in government, who should work in the interests of those who save and rely on their savings, rather than seeing pensions as another area to be tapped whenever there's a hole in the budget. This is important because this government is not likely to be an unconditional benefactor of savers; it plans to reduce the lifetime pensions allowance to £1 million, and will probably proceed with its plan (announced before the election) to cut back on pension tax relief for the highest earners.

However, the big picture is that we expect the savings framework to remain one of increased freedom and lower taxes when passing on money to the next generation. It will be interesting to see whether this philosophy extends to increasing the threshold on inheritance taxes.

This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.

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