Personal Pension  

Labour's pension manifesto pulled apart by experts

On private pensions, the manifesto is silent on pension tax relief rates and how they might be better applied.

However, in a rather vague annoucement, the manifesto stated that "Labour will end rip-off  hidden fees and charges."

When pressed for more details on whether this applied to defined benefit or defined contribution pensions, Labour's Alex Cunningham MP, shadow pensions minister, said: "Our aim is to make the pensions industry as a whole totally transparent. "

Barnett Waddingham's Mr McLean said: "It is not clear exactly what Labour intends to do in relation to 'rip-off fees and charges' beyond what has already been done to tackle these in legacy schemes and in relation to auto-enrolment."

There are also proposals to enable the development of large efficient pensions funds, which will mean more cash for scheme members and lower costs for employers.

In the Department for Work & Pensions green paper, published in February, the Conservative government proposed creating a defined benefit "superfund" to provide small DB schemes with scale.

However, it has said such a superfund should probably be a voluntary initiative, and should not be run directly by the government.

Another key manifesto measure is the proposed financial transactions tax, which Labour estimates would raise over £5bn a year.

A financial transaction tax is a levy placed on a specific type of monetary transaction for a particular purpose.

According to critics this move could actually have the indirect consequence of reducing tax raised and could have a big impact on pensioners and savers.

Piers Hiller, chief investment officer at Royal London Asset Management, said: "At a time of uncertainty about which markets (particularly international) investors will choose to utilise post Brexit, adding a further levy would significantly reduce the global competitive position of London. Transactional volumes will move to markets without a levy.

"Jobs will follow those volumes and as a consequence the overall tax take is likely to be lower due to reduced income tax and corporation tax paid. Those that would be hit the hardest are pensioners and those saving for a pension, who will see the value of their savings impacted by the levy.

"This is not a tax on the City, it's a tax on savers and pensioners."