Now key legislation could be delayed
THE ramifications of the Leave vote will take some time to comprehend.
But in the short term government resources will need to be redeployed to EU renegotiation and much of the daily business of government is likely to be put on the back burner.
This could result in delays to the Pensions Bill which would have introduced much needed protections for people saving in master trust pension schemes – a popular choice for auto- enrolment. It will also be interesting to see whether the Lifetime Isa and 2017 review of auto-enrolment are de-prioritised to clear the legislative decks.
With a new Prime Minister will come a new Cabinet and this could result in changes in the strategic direction for long-term savings, although government commitment to auto-enrolment has been consistentcons and frequently reaffirmed.reaf
WhenWh it comes to investments,inve stock markets have been caught off guard by the decision and this will inevitablyin result in shorttermt volatility, but this shouldn’t affect long-term investments like pensions.
For those nearing retirement, many pension providers will have hopefully sheltered their funds, moving them into less risky investments ten yearsy before retirement. But,B for those planning on buyingbuy an annuity, rates may becomeeco even less attractive shouldshouu the Bank of England take takee the decision to cut base rate further. RemainRe campaigners raised concernscon that a Leave vote couldco threaten the viability of theth pensions ‘triple lock’. TheT triple lock means that State pension payouts always increase by whatever is the highest of inflation, average earnings or 2.5 per cent.
Whether or not this is reviewed will depend on the new Prime Minister and the state of the UK’s finances.f But, even before theth Brexit vote, many arg argued this promise was unsu unsustainable.
Ov Over time, aspects of UK pens pension law will need to be dise disentangled from EU l legislation,i which presents an opportunity to reconstruct UK financial services legislation in a way that best serves the UK market in the most cost effective way.
Ultimately, pension saving remains one of the most tax efficient ways to save in the long term. The decision to leave the EU hasn’t changed that.