Prime minister Rishi Sunak is set to announce a “triple lock plus” deal to help boost the incomes of pensioners, in an attempt to win back older voters.
Reports in the national media have suggested the pledge would mean both the state pension and pensioners’ tax-free allowance will always rise in line with the highest of earnings, wages or 2.5%.
Lily Megson, policy director at My Pension Expert, said this is 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,” she added, “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.”
Mike Ambery, retirement savings director at Standard Life, said: “The combination of rising wages and high inflation mean that the triple lock has been extremely valuable over recent years. So much so that it is rapidly closing in on the tax-free personal allowance limit that has been frozen at £12,570 since 2021.
“The impact of this has been to drag more and more pensioners into the tax system, and the proposal on the table is designed to ensure that a gap is always maintained between the state pension and personal allowance so that this income remains tax free.
“There is some precedent for different allowances for pensioners as they are currently exempt from NI payments on earnings, but this would be an additional advantage.
“The question likely to hang over this approach is one of intergenerational fairness as while there are a large group of pensioners struggling to get by, there are also many who are comparatively well off and it appears the policy would apply to both groups.”
The main point, surely, is an economic one, as well as social angst…
Is there any point in dragging State Pension only payees into the tax net? To collect what? How much will the collection cost?
Moving the PA for SP only bods will pay for itself despite the protestations of Reeves – who has yet to reveal the location of Labour’s magic grand tree –
HMRC are already struggling to provide any meaningful service (polite version here) to those who need their assistance – very many of age 70+ may never have completed a tax return before on a working lifetime of PAYE etc.
So, are we really saying HMRC would welcome an influx of 2.5 – 3 million new subscribers? I think not!! (Please excuse the rhetorical). All this will create huge unhappiness, worry, frustration, and, worst of all, how are FoD going to recruit a waiting music DJ for the Octogenariams – yeah, go figure!!
Anyone presented with a new obligation might just need some advice – not available from the body most able to help….moreover, the majority of the new returns would be paper – very expensive to process and error heavy – as most will not have even a PC!
Finally, how much is to be collected from these new clients – maybe £30-£50? The resources of FoD, surely, would be better spent pursuing excessive avoidance and, especially, evaders who are likely to yield more than my 90 year old Aunt!
Perhaps this is what RS is counting on…. older people have time to wait on the phone, whilst FoD go after the hoodlums… no tea and cake for them then…
Last ditch from last ditch Tory government – who gets sucked in by his nonsense anymore?