'Too little, too late!' Sunak slammed over 'triple lock plus tax cut promise for state pensioners
Sunak's 'triple lock plus' promise slammed
GETTY
The proposed "triple lock plus" policy unveiled by Prime Minister Rishi Sunak today has been slammed as "too little, too late" by retirement experts.
Ahead of the upcoming General Election on July 4, the Tories are floating raising the tax-free allowance every year on pensions in line with the triple lock to avoid Britons paying money to HM Revenue and Customs (HMRC) on their state pension.
Thanks to the triple lock pledge, pensioners are guaranteed an annual rate hike in their state pension payments based on either the rate of inflation, average earnings or 2.5 per cent.
In 2021, the tax-free personal allowance for employees and workers was frozen at that year's level of £12,750, and remains at this amount today.
Chancellor Jeremy Hunt has said tax allowances will remain frozen until 2028, whereas previously they would have been raised in line with inflation.
According to the Office for Budget Responsibility (OBR), the state pension is expected to exceed the frozen personal allowance by 2027 which will result in pensioners paying tax on the benefit.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Pensioners have struggled with the cost of living in recent years
GETTYIf the Conservatives win the next General Election, the allowance freeze on pensioners would come to an end from next year in a move that will cost an estimated £2.4billion a year by 2029/30.
According to the Prime Minister, the policy "demonstrates we are on the side of pensioners" ahead of voters heading to the polls later this summer.
However, experts are criticising the "triple lock plus" as a "last minute" attempt to woo older Britons by a party "bracing for defeat".
Lily Megson, policy director at My Pension Expert, outlined the merits of the policy but questioned how "meaningful" it is.
She explained: "It’s a clear sign that Sunak is reverting to the old tried-and-tested model of trying to woo older voters immediately before a General Election.
"Sadly, although the 'Triple Lock Plus' undoubtedly has merits, last-minute policies from a party bracing for defeat are not what pension planners need.
"For too long, those in or nearing retirement have been overlooked. Meaningful policy to help address the financial challenges faced by over-60s has been lacking for many years, especially during the cost-of-living crisis.
"Sunak's late bid to close the gap on Labour by announcing favourable tax changes for those receiving a pension will do little to offer meaningful long-term assistance to those who have struggled under the burden of high inflation, high interest rates and a high tax burden."
Responding to the new policy, Labour declared the "triple lock plus" as not "credible" and said the party would not pursue if it got the keys to the Number 10.
Shadow paymaster general Jonathan Ashworth said: "Why would anyone believe the Tories and Rishi Sunak on tax after they left the country with the highest tax burden in 70 years?”
LATEST DEVELOPMENTS:
Sunak is hoping to woo older voters going into the General Election
PAEarlier today, Sunak said: "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.”
However, the Institute of Fiscal Studies' Paul Johnson noted: "This is simply a reversal of a tax increase that the Conservatives proposed, the idea is that the allowance doesn’t rise at all in line with inflation for the next three years.
"So half of the cost of this is simply not imposing the tax increase that was previously proposed.”