Tom Selby, senior analyst at AJ Bell, comments:
“A hung parliament is the worst possible outcome for pensioners and people saving for their retirement. We will now have a period of limbo while a new Government is formed and we may well be heading back to the polls later this year.
“It means that key decisions around the state retirement age, the state pension triple lock, social care funding and pension tax relief are all going to take a back seat while the wheels of Westminster slowly turn.
“Theresa May’s decision to call a snap election also derailed a number of key personal finance policies which were previously in train but got omitted from the Finance Bill. This includes proposals to reduce the Dividend Allowance from £5,000 to £2,000 and a cut to the Money Purchase Annual Allowance from £10,000 to £4,000.
“The MPAA reduction is particularly problematic because the Government said it would apply from 6 April 2017 but never actually put this into law. We therefore need urgent clarity on whether this will be applied retrospectively – this would be particularly harsh given many savers will have had no idea the new allowance had been announced. It would seem sensible to delay the cut until 2018, or at the very least allow anyone facing a tax charge to get a refund of their contributions.”
“A clampdown on pension scammers was also pushed back as a result of the election. The vital measures set out in the original consultation – which included a ban on cold-calling – need to be implemented as soon as possible to protect savers from fraudsters, but it looks like politics will get in the way of this important reform for a while longer.”