The Conservatives have promised to cut taxes for pensioners by creating a new “age-related” tax-free allowance – dubbed “triple lock plus”.
Currently, people can receive £12,570 a year from their pensions before they start paying income tax – the same amount as the personal allowance for those in work.
But if the party wins the next election, pensioners’ allowance would increase in line with average earnings, inflation or by 2.5% – whichever is higher – from next April, echoing the rules on annual pension increases of State.
Rishi Sunak said the move “demonstrates we are on the side of retirees” and would give people “peace of mind and retirement security”.
But Labour’s shadow general treasurer, Jonathan Ashworth, called it “another desperate measure by a chaotic Tory party torching any remaining façade of its claims to economic credibility”.
He added: “Why would anyone believe the Tories and Rishi Sunak’s taxes after they left the country with the highest tax burden in 70 years?”
The Liberal Democrats said the Conservatives had “hammered pensioners with years of unfair tax rises”, adding: “People will not be fooled by yet another empty promise from Rishi Sunak after this record of failure.”
The Conservatives first brought in the triple lock when they were in a coalition government with the Liberal Democrats in 2010 to face poverty of pensionerssaying the annual increase would protect pensioners from cost-of-living rises, and both Labor and the Liberal Democrats have promised to keep it in place.
However, although the State pension has continued to increase, the threshold for when both pensioners and employees those of working age Income tax payments have remained frozen since April 2021, when Boris Johnson was in power, meaning some people on lower incomes have been forced to pay tax.
This new measure would change the situation for retirees, with a “legislative guarantee that retirees’ personal allowance will always be higher than the level of the new State pension”.
The Conservatives said eight million people would save around £100 next year and gain more savings every year as tax relief increases, with the £2.4 billion a year policy paid for through “suppression ” to tax avoidance and evasion.
Boris Johnson froze the limits for paying income tax in April 2021, but Rishi Sunak plans to change this for pensioners. Photo: AP
Making the announcement, Sunak said: “I strongly believe that those who have worked hard all their lives should have peace of mind and security in retirement.
“Thanks to the Tories’ triple blockade, pensions have risen by £900 this year and now we’re going to cut your taxes by around £100 next year.
“This bold action demonstrates that we are on the side of pensioners. The alternative is for the Labor Party to drag everyone on the full state pension into income tax for the first time in history.”
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But Labour’s Ashworth hit back, saying: “Not only have they promised to spend tens of billions of pounds since the start of this campaign, they have a completely unfunded £46 billion policy to scrap national insurance which threatens the very basis of the State pension.
“Labour will protect the triple lock. But Rishi Sunak is planning to reward British pensioners for their loyalty by stabbing them in the back, just as he did to Boris Johnson and as he did to his own MPs.”
Sunak turns his gaze to older voters – and leaves questions for the Labor Party
This is another bold and very political announcement from the Conservatives.
Just a few months ago there was a row in Whitehall about whether the triple lock had any future, given its exorbitant cost.
Now, the Conservatives have gone in the opposite direction, presenting a reduction in pensioner income tax as a reinforcement of the expensive ratchet measure.
It will likely raise questions of generational fairness, given that tax caps for those of working age are still expected to remain frozen until 2028, while at the same time the triple lock has seen the State Pension rise by 8.5% this year and 10.1% in 2023.
Conservative sources pointed out that workers had already suffered a huge cut in national insurance. And although they stated that there are currently no plans to unfreeze licenses more broadly, they re-emphasized their ambition to continue cutting taxes in other areas, if possible.
This move is political because it will inevitably lead to questions about whether Labor will follow suit and reflect this promise.
If they don’t, expect accusations of a labor tax increase for retirees.
What’s more, with the State Pension expected to rise above the current level of benefit within a few years, the Conservatives also suggest that a Labor government would drag everyone claiming the State Pension into paying income tax for the first time. turn.
The lame irony there, of course, is that the main reason this would happen would be the freeze on tax deductions that the Conservatives brought in.
Coming off the back of the national services political campaign, this is clearly yet another attempt to reach out to the conservative base of older voters.
Combine this with Rishi Sunak’s recent visits to traditional Conservative heartland seats and it’s hard not to conclude that this is a campaign currently in defensive mode.
What is perhaps most interesting is that, so far, neither Labor nor the Liberal Democrats have directly criticized the substance of the policy change, no doubt aware of the political risks of being seen as aligned against tax cuts for pensioners.
Although conservatives focus on pensioners, Labor will use Tuesday to appeal to companies as shadow chancellor Rachel Reeves gives her first major speech of the general election campaign.
She will promise to manage “the most pro-growth Treasury in our country’s history” if her party takes power on July 4, and promises to be “pro-worker and pro-business, knowing that each depends on the success of the other “.
That comes later more than 120 business leadersincluding chef Tom Kerridge and Wikileaks founder Jimmy Wales signed an open letter supporting the Labor Party to “realize the UK’s full economic potential”.
The Liberal Democrats will turn their attention to crime during the campaign, pledging to introduce a “burglary response guarantee” so that all domestic burglaries are “assisted by police and properly investigated”.
This story originally appeared on News.sky.com read the full story
