Election 2024 – Liberal Democrats manifesto and pensions

In the first of a series of manifesto reviews, we’ve looked at what the Liberal Democrats are promising on pensions in their manifesto (For A Fair Deal – Manifesto 2024).

Summary

Although there is nothing particularly radical in the Liberal Democrats policy pledges on pensions, there is extensive coverage. The Liberal Democrats have covered pensions in more detail than any of the other parties so far.

Whilst promising to maintain the triple lock on State Pensions will come as no surprise, there are more progressive steps on gig economy workers and access to pensions.

Perhaps the biggest impact for trustees and sponsors occupational pension schemes would be the proposed tightening of climate change risk reporting from disclosure of how investments perform against the TCFD’s Paris Agreement criteria to demonstrating that their investments do comply.

Policy area	Manifesto text	Comment	Page
Worker status – gig economy	Establishing a new ‘dependent contractor’ employment status in between employment and self-employment, with entitlements to basic rights such as minimum earnings levels, sick pay and holiday entitlement.	Case law has already established that many working in the gig economy are workers for the purposes of rights under the Pensions Act 2008 (automatic enrolment). We would expect dependent contractor status to also be covered by automatic enrolment.	21
Worker status – gig economy	Reviewing rules concerning pensions so that those in the gig economy don’t lose out.	This reinforces the point above to suggest that the Lib Dems would make it clear that automatic enrolment extends to those working in the gig economy.	22
DC – pot follows member / lifetime provider	Reviewing rules concerning pensions so that … portability between roles is protected.	The Lib Dems do not go into detail on pension portability, but it is clear that they will, at least, review pot follows member / lifetime provider models.	22
ESG	Regulating financial services to encourage climate-friendly investments, including requiring pension funds and managers to show that their portfolio investments are consistent with the Paris Agreement, and creating new powers for regulators to act if banks and other investors are not managing climate risks properly.	TCFD disclosure requirements already require in-scope pension schemes to measure the extent to which schemes’ investments are aligned with the Paris Agreement goal of pursuing efforts to limit the global average temperature increase to 1.5°C above pre-industrial levels. The Liberal Democrats go further than requiring disclosure. Their pledge will require pension funds and managers to show that their investments are consistent with the Paris Agreement. In addition, there is no smaller scheme exemption, so this could apply to all pension schemes (unlike TCFD disclosure, which applies to schemes with assets of >£1 billion).	28
State pension – triple lock	Support pensioners by protecting the triple lock so that pensions always rise in line with inflation, wages or 2.5% – whichever is highest.	This maintains the status quo on the triple lock.	51
State pension – WASPI women	Ensure that women born in the 1950s are finally treated fairly and properly compensated.	The current status of compensation for women adversely affected by state pension age increases is that the Parliamentary and Health Service Ombudsman issued a report in March 2024. This report contained a request for Parliament to identify how to provide an appropriate remedy for those who have suffered injustice due to maladministration on the part of DWP. The government has yet to confirm what it will do.	51
State pensions – administration	Improving the State Pension system by investing in helplines to ensure quicker responses to queries and resolution of underpayments.		52
State pensions – top-up payments	Ending the scandal of lost top-up payments by overhauling the processing system and providing proper receipts.	In April 2024, the DWP launched an online portal allow people to both check if buying top-ups will boost their state pension and to make payments. Long delays and missing top-up payments are still being reported.	53
Pension saving – gender pension gap	Give everyone the chance to enjoy a decent retirement by developing measures to end the gender pension gap in private pensions.	There is no detail provided in the manifesto on what these measures might be.	52
Pension saving – carers and pensions	Give everyone the chance to enjoy a decent retirement by developing measures to ensure working-age carers can save properly for retirement.	There is no detail provided in the manifesto on what these measures might be.	52