Conservatives pledge to raise tax-free pension allowance with “Triple Lock Plus”

The Conservatives have unveiled a new promise to increase the tax-free pension allowance through a “Triple Lock Plus” if they win the upcoming general election. This move aims to support pensioners by ensuring their personal allowance rises by at least 2.5% or in line with the highest of earnings or inflation.

Prime Minister Rishi Sunak emphasized that this initiative demonstrates the party’s commitment to pensioners, who are projected to save £275 by 2030 under this plan. However, Labour has criticized the policy as a “desperate move from a chaotic Tory party.”

Currently, the state pension already increases in line with the highest of average earnings, wages, or 2.5%. Both the Conservatives and Labour have pledged to maintain this policy to ensure pensions keep up with rising prices and wages.

With income tax thresholds frozen since 2021, there are concerns that by 2027, more pensioners could end up paying income tax as the state pension is expected to surpass the tax-free personal allowance. To address this issue, the Conservatives propose keeping the state pension below the tax-free threshold.

The cost of implementing this plan is estimated to be £2.4 billion annually by 2029-30, funded through strategies to improve tax collection and crack down on tax avoidance and evasion. Mr. Sunak highlighted the importance of providing peace of mind and security in retirement for those who have worked hard throughout their lives.

While the Conservatives argue that this move benefits pensioners, Labour and the Liberal Democrats have criticized the party for past tax hikes and broken promises. The debate over pension policies is likely to be a key issue in the upcoming election, with different parties presenting contrasting visions for supporting retirees.