Is there an election round the corner?
It is a well worn cliche that politicians can be less than honest. But perhaps some of the blame lies with an electorate that all too often allows them to get away with it.
It may have started with the political conference season but British newspapers ever since have seen announcements and proposals designed to appeal to the narrow wishes of certain electorally valuable portions of the population.
Take the Conservative’s proposals for a new pensions regime as one prominent example. Expat & Offshore has been inundated with pleas for information from expats all over the world who have been concerned and excited in equal measure.
What do the proposals mean? Will they actually happen? What will be the result for me and my retirement?
The short answer is unfortunately: ‘we don’t know.’.
In combination with other proposed tax cuts, including a raising the higher rate income tax threshold to £50 000, it is difficult to see how the Chancellor will be able to keep his promise to balance the budget by 2018.
Meanwhile the Labour Party has promised, among other things; a new mansion tax, abolition of the so called Bedroom Tax and to cut higher-rate pensions tax relief to 20 per cent.
Everything is made far more complicated and uncertain by the likelihood of a continuation of coalition government due to the rise of four party politics in the UK.
With UKIP and now even the Greens achieving significant vote shares in the polls, it is likely that whichever of the two main parties are in government next year, they will have to share their policy agenda with an additional party.
This, despite their woeful polling performance, is still likely to be the Liberal Democrats. Their proposed policies include a further £250 000 cut to the pension lifetime allowance. This is in addition to the £550 000 already cut in this parliament.
Interestingly, most commentators have declared that whilst unpopular, the Lib Dem’s proposals are the only ones that may lead to the promised balanced budget. Both the Conservatives and Labour have been accused of putting forward an unfunded tax and spending agenda.
What everyone with a UK pension needs to understand is that these competing and conflicting policies cannot and will not be implemented in their entirety. The new British political landscape means that every party in a future coalition government will have to compromise on their aims.
Just because a particular policy is being promised now, it simply does not mean that it can be relied upon to take effect come the day following the May 2015 election.
What’s not up for debate is that the next government, no matter which party or parties will constitute it, will have to deal with a budget deficit that is still worryingly high.
At Expat & Offshore we are urging our readers not to make judgements based on blatantly political policy announcements by the parties. Nobody knows which party, or combination of parties, will be in government come May 2015 and, with coalition governments increasingly likely, there will be an intense negotiation to decide what policy agenda will be pursued.