By May 2010, at the latest, Britain will go to the polls and is tipped to vote in a new Conservative Government.

Yet, regardless of which party forms the next administration, one thing is certain; the public purse will be almost empty and hard choices on where to cut spending will have to be made.

Debate on how spending can be cut is already underway and it is simply not credible for any political leader at present to offer any commitments that will notably increase public spending.

For the pensions industry, this is likely to have a number of implications. One is that in the short to medium term, pension policy is likely to more focus on saving public money, rather than concentrating on radical reforms.

Policies on the pension wish list, such as liberalisation of the pension taxation regime, with greater freedom on how pension benefits are taken, and more generous incentives for pensions and savings are almost certainly to be ruled out as too expensive.

Another consequence is that certain policies, such as the introduction of personal accounts in 2012, are likely to go ahead under a new government if they are on the road to delivery.

Stopping a planned reform and starting again is likely to be seen as an expensive option and a new government can take the credit for any successes, while passing the blame if things go wrong.

In any case, personal accounts will require more employers to make a pension contribution on their employees’ behalf and the Conservatives are part of a cross-party consensus behind this overall policy thrust.

One area though were the Tories are signalled a break from the past is over financial regulation, with shadow chancellor George Osborne saying he would return powers to the Bank of England and replace the Financial Services Authority with a new consumer regulator.

This appears to be a reaction to the failure of the current regulatory system to prevent bank collapses, but pundits have pointed out that the Bank of England missed its share of bank failures in the past – BCCI and Barings among them.

Setting up a new regulator and de-commissioning the FSA could be costly, so the neck of principle here could yet bend to the yoke of financial reality.

In past years, life and pensions executives and incoming politicians could indulge in mutual back-scratching and a certain shared optimism about how things could be improved or reformed.

But post the global financial crisis and with the UK economy in recession, it is harder to maintain any illusions.

A lot can happen between now and the May general election, but most people expect the Conservatives, under David Cameron, to form the next government, with Labour and Gordon Brown cast into the opposition seats at Westminster.

Nonetheless, whatever the life and pensions industry wants from the next government, it will have to base its case on cold, hard facts and strong financial arguments, rather than appeals to any higher motives.