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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

Our expert helps a reader concerned about the impact of a new government on his retirement savings
Thursday 03 Oct 2019 Author: Tom Selby

I’m 58 and concerned about the impact a general election and change of government could have on my finances. Are we likely to see any big changes to the pension rules and is there anything I can do to protect myself? One option I’m considering is taking my entire SIPP (worth about £60,000) out and investing in an ISA instead.


Tom Selby AJ Bell Senior Analyst says:

As with Brexit, when it comes to other periods of short-term instability such as a general election it’s worth bearing in mind the pensions are for the long-term. You should therefore avoid making any panic decisions with your fund based on what you think may or may not happen as a result of such events.

Taking all of your money out of your pension and investing in something like an ISA almost certainly isn’t advisable.

While a quarter of your pension withdrawal will be tax-free, the rest will be taxed in the same way as income, so if you take a large chunk out you risk paying more income tax than is necessary. In addition, if it is your first taxable withdrawal you’ll trigger the money purchase annual allowance, reducing the amount you can save tax-free each year from £40,000 to just £4,000.

Furthermore, pensions and ISAs enjoy exactly the same tax-free investment growth and usually provide a similar level of investment choice too. So there would be no obvious financial benefit to swapping one product for another.

It is, however, worth keeping an eye on party manifestos and other election promises so you are prepared for any possible changes that could impact your finances.

There have been few specific pledges made in relation to pensions so far, although that is likely to change if we get into a general election campaign.

Historically, governments have tended to protect the pensions people have already saved – sometimes referred to as ‘accrued rights’ –  so if there are any big announcements they should only apply to future retirement contributions.

Perhaps one of the biggest electoral battlegrounds will be around the state pension. While the Conservative Government has set out plans to increase the state pension age to 67 by 2028 and 68 by 2037, Labour has previously said it will stop all increases beyond 66 and review future increases.

The costs of state pensions are spiralling and savers should prepare for a world where they have to work longer regardless of who eventually gets the keys to Number 10.


Send an email to with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide guidance and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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