Queen’s Speech: What does it mean for pensions and social care?

Hannah Godfrey takes a look

The Brexit-heavy Queen’s Speech failed to mention some of the government’s more controversial policies from the election manifesto, such as the so-called ‘dementia tax’ and the scrapping of the triple lock. So what does it mean for pensions and social care?

The Queen’s Speech answered few questions about the pensions landscape of the future when it was delivered at the state opening of parliament on 21 June.

No information was given on the status of the triple lock, despite the Conservatives being the only party to campaign to reduce it to a double lock by 2020 in the run up to the snap general election in June.

State pension age and addressing intergenerational fairness were also not mentioned, neither were the previously proposed cuts to the money purchase annual allowance, which were shelved ahead of the election.

While there was a reference to social care reforms, again no details were given.

The Queen simply said: “My ministers will work to improve social care and bring forward proposals for consultation.”

The line remains the same as the watered-down version of the initial social care proposals first outlined in the Conservative manifesto, which May U-turned on following a public backlash.

Prime minister Theresa May had initially proposed her party would raise the means-tested threshold for elderly care from £23,250 to £100,000. This would be taken from a person’s estate, including their home, when they die and would not be capped. She later said there would be a cap after all.

The background notes released alongside the speech said the ageing population “presents one of our nation’s most profound challenges”.

The notes said the consultation would set out options to improve the social care system and to “put it on a more secure financial footing, supporting people, families and communities to prepare for old age, and address issued related to the quality of care and variation in practice”.

It said: “The government has already invested an additional £2bn to put social care on a more stable footing and alleviate short-term pressures across the health and care system. However, further reform is required to ensure that the system is prepared to meet the challenges of the increasing numbers of over 75s.”

No Clarity

The industry was quick to react to the omissions in the speech.

AJ Bell senior analyst Tom Selby said: [The Queen’s speech] gives no clarity on either the major structural strains on the UK’s pensions system or the outstanding legislative issues that were sidelined by the snap election. The ageing society remains arguably the key challenge facing policymakers today.

“It’s easy to forget vital domestic personal finance reforms need addressing. In particular, we now need urgent clarity on how the Money Purchase Annual Allowance cut will be applied and whether the proposed dividend allowance reduction will still be introduced in April next year.”

Royal London director of policy Steve Webb said he felt it was the inconclusive election result that meant issues like social care have been “kicked into the long grass.

“No-one can know with any certainty how much they might have to pay for their care, how much the government will contribute and whether they will have to sell their home,” said Webb.

“But the lack of a government majority could be an opportunity to seek cross-party consensus on social care funding so that a system can be put in place which will resolve these issues once and for all and give clarity to families wrestling with these complex issues,” he added.

‘Best Possible Deal’

The speech itself was Brexit-heavy, immediately outlining the government’s priority to “secure the best possible deal as the country leaves the EU”.

 The Queen also said ministers were committed to working with devolved administrations, businesses and others to “build the widest consensus on the countries’ future outside the EU”.

She also alluded to using low taxes to “spread prosperity and opportunity across the country through a new modern industrial strategy”.