Pensioners will be given a tax break worth £100 in 2025 that will grow over time and add to their incomes on top of rises in the pension, British Prime Minister Rishi Sunak is expected to promise on Tuesday.
From April next year the income tax personal allowance for pensioners will be increased in line with the triple lock, as Mr Sunak continues the Conservatives’ election campaign.
As part of the plan, the state pension and pensioners’ tax-free allowance will always rise in line with the highest of earnings, wages or 2.5 per cent.
Billed the “triple lock-plus”, the policy is estimated to cost £2.4 billion ($3 billion) a year by 2029-2030, a price close to Mr Sunak’s proposed national service duty for all 18-year-olds, billed at £2.5 billion a year.
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.
Rishi Sunak through the years - in pictures
-
British Prime Minister Rishi Sunak announces July 4 as the date for the 2024 general election at No 10 Downing Street. Here, The National looks back at his political career. Getty Images -
Mr Sunak during local election campaigning in Teesside in May 2024. Getty Images -
Mr Sunak presents cupcakes to journalists on board a plane on the way to Warsaw in April 2024. Getty Images -
Mr Sunak during a press conference in Downing Street in January after the Safety of Rwanda Bill passed its third reading in the House of Commons. Getty Images -
Being applauded after his speech at the Conservative Party conference in October 2023. Getty Images -
Looking pensive alongside then-home secretary Suella Braverman at No 10 in October 2023. She didn't last much longer in the cabinet. Getty Images -
Mr Sunak sits in an old Special Branch police vehicle which was used to transport former prime minister Margaret Thatcher, in July 2023. Getty Images -
On board Border Agency cutter HMC Seeker during a visit to Dover in June 2023. Getty Images -
Mr Sunak alongside European Commission President Ursula von der Leyen, Canada's Prime Minister Justin Trudeau, US President Joe Biden, French President Emmanuel Macron and German Chancellor Olaf Scholz during the G7 Summit in May 2023. Getty Images -
Mr Sunak and his wife Akshata Murty arriving in Japan ahead of the G7 Summit in May 2023. Getty Images -
Mr Sunak and Chancellor Jeremy Hunt sending a message at Accrington Market Hall in January 2023. Getty Images -
Mr Sunak and Ukrainian President Volodymyr Zelenskyy meet in Ukraine's capital Kyiv in November 2022. Getty Images -
King Charles III welcomes Mr Sunak during an audience at Buckingham Palace, where he invited the newly elected leader of the Conservative Party to become Prime Minister and form a new government in October 2022. Getty Images -
Mr Sunak makes a statement outside No 10 in October 2022 after taking office. Getty Images -
Mr Sunak arrives inside Number 10 in October 2022. Photo: Simon Walker/ No 10 Downing Street -
Greeted by colleagues at Conservative Party HQ after having been announced winner of the leadership contest in October 2022. Getty Images -
Mr Sunak at Westminster Hall in London following the death of Queen Elizabeth II in September 2022. PA -
Mr Sunak visits his family's old business, Bassett Pharmacy, on the campaign trail in August 2022. Getty Images -
Mr Sunak looks at an NLAW anti-tank launcher during a visit to the Thales Defence System plant in Belfast in August 2022. Getty Images -
At a hustings event in Exeter in August 2022. Getty Images -
Celebrates England's first goal as he watches the Women's Euro 2022 final in Salisbury in July 2022. Getty Images -
Mr Sunak and Ms Truss take part in the BBC Leadership debate at Victoria Hall, Hanley, in July 2022. Getty Images -
With daughters Krisna and Anoushka and wife Akshata Murthy in July 2022. Getty Images -
Opening the Great Ayton Village Fete during the queen’s Platinum Jubilee celebrations in June 2022. Getty Images -
Mr Sunak and Ms Murthy speak to then-Prince Charles at a British Asian Trust event in February 2022. Getty Images -
Mr Sunak arrives at COP26 in Glasgow in November 2021 when he was chancellor. Getty Images -
Holding the budget box as he departs 11 Downing Street to deliver his Autumn Budget in October 2021. Getty Images -
At a press conference on the 2021 Budget in London in March 2021. Getty Images -
With former prime minister Boris Johnson during a visit to PD Ports on the River Tees in March 2021. Getty Images -
Mr Sunak poses with the budget box at 11 Downing Street in March 2021. Getty Images -
Meeting staff back at work after being furloughed at Hamleys toy shop in London, December 2020. Photo: HM Treasury -
Mr Sunak visits the Imperial Clinic Research Facility at Hammersmith Hospital, London, in November 2020. Getty Images -
Lighting a candle for Diwali on Downing Street, November 2020. Getty Images -
Working on a speech in his flat above 11 Downing Street in November 2020. Photo: HM Treasury -
Mr Johnson and Mr Sunak visit the headquarters of Octopus Energy in London in October 2020. Getty Images -
With his 'Winter Economy Plan' outside 11 Downing Street in September 2020. AFP -
Decorating a plate at Emma Bridgewater pottery in Stoke pottery in September 2020. Getty Images -
Promoting 'eat out to help out' on the Isle of Bute, Scotland, in August 2020. Getty Images -
A member of the public takes a selfie with Rishi Sunak during a visit to Scotland in August 2020. AFP -
Visiting a Wagamama restaurant in central London in July 2020. Photo: HM Treasury -
Rishi Sunak visits a Pret A Manger in Westminster in July 2020. HM Treasury -
With Mr Johnson at his first Cabinet meeting after a reshuffle at 10 Downing Street in February 2020. Getty Images -
Mr Sunak speaks during a general election debate in Cardiff in November 2019. Getty Images
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 make those receiving the full state pension pay income tax.
“I passionately believe that those who have worked hard all their lives should have peace of mind and security in retirement," he 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.”
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.
“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.”
