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Pensioners would get a £2.4bn income tax break under the Tories, Sunak to vow

27 May 2024 3 minute read
Prime Minister Rishi Sunak. Photo Toby Melville/PA Wire

Pensioners will be given a tax break worth £2.4 billion a year, Rishi Sunak is expected to promise.

The Prime Minister will announce on Tuesday that from April next year the income tax personal allowance for pensioners will be increased in line with the triple lock, as he continues the Conservatives’ election campaign.

The pledge would mean both the state pension and pensioners’ tax-free allowance will always rise in line with the highest of earnings, wages or 2.5%.

Billed the “triple lock plus”, the policy is estimated to cost £2.4 billion a year by 2029/30, a price tag which mirrors Mr Sunak’s proposed national service duty for all 18-year-olds, billed at £2.5 billion a year.

Tax cut

The tax cut will be funded through a previously announced plan to raise £6 billion a year by the end of the next parliament by clamping down on tax avoidance and evasion.

For individual pensioners, it would be worth around £100 in 2025 according to the Tories, and would grow over time, adding to their incomes on top of rises in the state pension.

The policy follows criticism of Chancellor Jeremy Hunt’s decision to cut national insurance by 2p at the spring budget, after a similar cut in the autumn.

State pensioners did not benefit from the cut, as they do not pay national insurance.

While Mr Sunak said the Tories were committed to the triple lock, he claimed Labour would by contrast drag pensioners in receipt of the full state pension “into income tax for the first time in history”.

The Prime Minister said: “I passionately believe that those who have worked hard all their lives should have peace of mind and security in retirement.

“Thanks to the Conservatives’ triple lock, pensions have risen by £900 this year and now we will cut their taxes by around £100 next year.

“This bold action demonstrates we are on the side of pensioners. The alternative is Labour dragging everyone in receipt of the full state pension into income tax for the first time in history.”

‘Not credible’

But Labour claimed the Tories’ offer to pensioners was not credible.

“Why would anyone believe the Tories and Rishi Sunak on tax after they left the country with the highest tax burden in 70 years?” said Jonathan Ashworth, the shadow paymaster general.

He added: “This is just another desperate move from a chaotic Tory Party torching any remaining facade of its claims to economic credibility.

“Not only have they promised to spend tens of billions of pounds since this campaign began, they also have a completely unfunded £46 billion policy to scrap national insurance that threatens the very basis of the state pension.

“Labour will protect the triple lock. But Rishi Sunak is planning to reward Britain’s pensioners for their loyalty by stabbing them in the back, just like he did to Boris Johnson and just like he has done to his own MPs.”

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John Ellis
John Ellis
22 days ago

I’ll be 79 later this this summer, but advancing age doesn’t of course mean that I wouldn’t welcome a boost to my income.

Nevertheless there are limits, and one very significant one is that my vote isn’t for sale. So my response will be ‘thanks, but no thanks’..

22 days ago

Free crisps and chocolate bars next.

That is 5 billion he could be plowing into mental acre, social care, healthcare and reigning back terrible renting situation, should have been doing that years ago. Must be an election coming.

edit. remembering that since voter registration, the older population are more likely to have the correct ID to vote.

Last edited 22 days ago by Jeff
22 days ago

It’s not a tax cut, it just offsets his proposed tax transfer from the working age population to pensioners, especially affecting those receiving a modest income additional to the state pension.

Steve Woods
Steve Woods
21 days ago

Dear alleged prime minister,

You cannot buy this pensioner’s vote for a £100 per annum bribe.

Fi yn unig
Fi yn unig
21 days ago

In just two days, Sunak has bashed the youth and bribed the pensioners. Neither of the policies aimed at these groups will come about and both groups will be dumped on from a great height if he was returned as PM but just like Ed Davey, Sunak can say anything now knowing for certain that he won’t have to follow through on it.

21 days ago

Not much of a deal or dealbreaker really. If he was really concerned about the low level of State Pension he should have addressed it by now. Also he should have made life easier for those on low pay, not just pensioners. Raising the tax threshold would be a good start then insert a “starter rate” of 10% on say the first £5000 earnings above the zero band. How would he pay for this generosity ? Well he doesn’t seem to have difficulty making funds available for all sorts of pet projects so doing something good for us the citizens… Read more »

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