Making sure the State Pension is always below pensioners tax free threshold
I welcome today’s announcement by the Prime Minister setting out a new ‘Triple Lock’ – the ‘Triple Lock Plus’. This policy will make sure the State Pension is always below their tax free threshold.
Should a Conservative government be returned, from next April the personal allowance for pensioners will be increased in line with the Triple Lock via a new age-related allowance. Through this new allowance, legislation will be passed to guarantee that the pensioner’s personal allowance will increase at least 2.5% or in line with the highest of earnings or inflation. This means the personal allowance will be higher than the State Pension and this will be the case for each year of the next Parliament.
Every pensioner should be afforded dignity and security in their retirement.
The Triple Lock has seen the State Pension increase by £900 this year, and Office for Budget Responsibility forecasts suggest it will increase by a further £428 next April, i.e. £11,970 per annum, continuing to increase to around £13,200 by the end of the next Parliament.
The Triple Lock Plus, estimated to cost £2.4 billion, will be fully funded through the Conservative government’s ongoing plan to clamp down on tax avoidance and evasion – the tax gap. Due to a range of actions, including increased penalties, the UK's tax gap – is currently at an all-time low of 4.8 per cent, down from 7.5 per cent in 2005-06. This gives me every confidence we will see the revenue gap decrease in line with estimates which will raise an additional £6 billion a year.
I hear a lot from Labour deriding our support for pensioners, but its worth reminding ourselves that as Labour never introduced a Triple Lock, pensions sometimes barely rose at all - in 1999, for example, Gordon Brown announced an increase of 75 pence, £66.75 per week to £67.50. This is simply not good enough.
