Today the Prime Minister has announced a new Triple Lock Plus which will cut income tax for pensioners from next year and make sure the state pension is always below their tax free threshold. This will ensure dignity and financial security in retirement. 

• We have cut tax for working people by reducing National Insurance from 12 per cent to 8 per cent. Now we will cut tax for pensioners too.

• That is why, from next April we will increase the personal allowance for pensioners in line with the Triple Lock by introducing a new age-related allowance – a tax cut of around £100 for 8 million pensioners. And we will guarantee in legislation that the pensioners’ personal allowance will rise in line with the highest of earnings, prices or 2.5 per cent so that it is higher than the State Pension in each year of the next Parliament: the new Triple Lock Plus.

• We are doing this because it is a core Conservative value that those who have worked hard during their lives should have dignity and security in retirement. Under Labour’s the State Pension will be dragged into income tax for the first time, raiding pensioners just like the last Labour government.

Our Plan: 

To provide pensioners with dignity and financial security, in the next Parliament we will introduce the new Triple Lock Plus. This will comprise of two elements:

• Continuing to uprate the State Pension in line with the Triple Lock: following the £900 increase to State Pension this year next year it will rise by £428. On current forecasts, this will mean the State Pension increases by a further £428 in April next year to over £11,970; and increases by around £1,685 to £13,200 by the end of the Parliament (Office for Budget Responsibility, Long-term economic determinants, March 2024, link).

• Cutting tax for pensioners from next year by legislating to ensure that the tax-free personal allowance for pensioners also rises by the Triple Lock – guaranteeing that the State Pension is always below the tax-free threshold. From April 2025, we will increase the personal allowance for pensioners by introducing a new age-related personal allowance, which also increases in line with the highest of prices, earnings or 2.5 per cent – the new Triple Lock Plus. This is a tax cut of around £100 for 8 million pensioners next year – rising to £275 a year by the end of the Parliament.

• The new Triple Lock Plus means that, next year, the average pensioner will see:
  • An increase in the State Pension of £428
  • An income tax cut of £95

• By the end of the Parliament, the average pensioner will see:
  • An increase in the State Pension of £1,677 a year
  • An income tax cut of £275 a year

• This policy is fully funded through our clear plan to tackle tax avoidance and evasion. This policy will cost £2.4 billion a year by 2029-30. It will be funded through our plan to raise an extra £6 billion a year by clamping down on tax avoidance and evasion. It will apply UK-wide.

Conservative record: 

• We introduced the Triple Lock so the State Pension always rises by the highest of earnings, prices or 2.5 per cent. As a result, pensioners got a £900 increase in the State Pension in April this year – an increase of 8.5 per cent. The State Pension has risen by £3,700 since 2010 in cash terms – £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings since 2010 (HM Treasury, Autumn Statement 2023, 22 November 2023, link; HM Treasury, Spring Budget 2024, 6 March 2024, link). 

• We have provided pensioners with Winter Fuel Payments, free eye tests, NHS prescriptions and free bus passes.

Labour will drag the State Pension into income tax – waging an all-out assault on pensioners just like the last Labour government did:

• Under Labour, for the first time in history the State Pension will be dragged into income tax in the next Parliament. Because the State Pension rises faster than inflation, the new State Pension is forecast to increase to a level higher than the personal income tax allowance from April 2027. This would drag millions of pensioners into paying income tax for the first time.

• Labour’s pensions tax raid wiped at least £118 billion off the value of people’s pensions. Between 1997 and 2013-14, the abolition of payable tax credits for pension schemes cost £117.97 billion (OBR, Budget/PBR/Autumn Statement measures database, 23 April 2014, archived).

• Because Labour didn’t have the Triple Lock, pensions sometimes barely rose at all – including by a paltry 75 pence in 2000. In 1999, Gordon Brown announced a derisory increase of the Basic State Pension – from £66.75 per week to £67.50 (The Daily Telegraph, 18 June 2000, link).

• Labour’s new tax adviser called pensioners ‘codgers’, said they have ‘had it ridiculously good’ and argued they should pay national insurance. Edward Troup, Labour’s new tax adviser, said that today’s pensioners ‘had it ridiculously good’, adding that it is a ‘complete disgrace’ that pensioners aren’t paying national insurance and we should be ‘looking [to tax] the codgers’ (Resolution Foundation, A taxing election: Do the parties’ tax plans match up to the needs of modern Britain?, 13 November 2019, link).

Q: Does this apply across the UK?

Yes, the new age-related allowance is reserved, and so will apply UK wide.