AXA’s Director of Protection Marketing, Iain Mallon, examines the coalition agreement – and the impact it could have on protection

The results are in, the alliances have been formed, and we are facing a new and very different political landscape.

The Conservative-Lib Dem coalition has published its coalition agreement. Although many of the finer details are yet to be announced by the two parties, it is clear from the overall agreement protection will be impacted by the changes.

Welfare to Work programme

Organisations tasked with getting those who aren’t working back into jobs will be selected based on results. Does this mean it will become harder for those who are ill to claim benefits, and therefore increase the need for Income Protection?

HIPs to go, capital gains tax to increase

HIPs have been scrapped, although the energy performance certificate element has been retained. This might help reinvigorate the housing market, and related protection sales, as sellers become able to market their house without as much financial commitment.

On the flip side, buy-to-let investors may well hold fire until they find out by just how much CGT will increase – and therefore whether it’s worth them investing in property. They might also be considering selling up fast before the increases come into force.

More loans for SMEs

The coalition has committed to ensuring credit is available to SMEs. Will a rise in the number of business loans result in increased need for business protection cover, such as key person loan protection?

Later retirement

The default retirement age will be phased out, and the state pension age is likely to increase more rapidly than planned. With people working for longer, they might need to consider longer terms for protection policies if their financial commitments will last until they’re older.

What’s next?

The first budget of the coalition has been set for 22nd June so more of the detail should be revealed then.

In the meantime, if you want to discuss any of the opportunities or issues for protection raised so far by the coalition, please call your AXA Protection Account Manager or call the AXA Protection Line on 0845 607 1979 (option 2).