The Conservative Party has made pensions and pensioners are key part of its election manifesto, which was released today.
They have pledged to introduce a triple lock ‘plus’ — ensuring a personal allowance for pensioners remains above the basic state pension, by increasing it in line with the triple lock. This will see it increased annually by inflation, average earnings or 2.5 per cent, whatever is higher.
The Conservatives has also pledged to keep the triple lock on pensions for at least the next five years and committed to keeping tax relief on pension contributions.
The Labour Party are will publish their manifesto on Thursday.
Aegon pensions director Steven Cameron says: “ “The Conservative manifesto, published today, provides written confirmation of a range of key pension measures.
“The Conservatives have reaffirmed their commitment to retain the triple lock, for a further five years. As trailed they are also proposing plans for a triple lock plus. This will make sure state pensioners have a personal allowance above the full new state pension, meaning they won’t be subject to income tax on this pension.
“The manifesto also confirms the Conservatives won’t change the system of pensions tax relief for the next five years, retaining a top-up based on an individual’s highest marginal rate of income tax, which is very valuable particularly to higher earners. There’s also a commitment to the 25% tax free lump sum and no new or increased pension taxes.
“Unfortunately, a number of important future pensions developments don’t get a mention, including when enhancements to automatic enrolment might be advanced.
“These would open up automatic enrolment into workplace pensions from age 18 rather than 22 and would gradually increase the minimum contributions to 8 per cent of earnings from the first £1, rather than only on earnings above £6,240.
“On a related note, of particular interest to our most elderly and their families, the Conservatives have recommitted to their plan on social care funding, originally to have been implemented in October 2023 but delayed for 2 years. This will introduce an overall cap on eligible care costs of £86,000 meaning those needing lengthy periods of care don’t face unlimited personal costs which can wipe out lifetime savings.”
TPT Retirement Solutions chief executive David Lane adds: “The triple lock plus pledge in the Conservative Manifesto could prove popular with some older voters.
“Our research found that more than half of working people are worried about the cost of retirement, and 63 per cent of those aged 55 or older want the next Government to maintain the triple lock. Many people are struggling to save enough for retirement and will rely on the state pension. If this policy isn’t introduced and income tax thresholds remain frozen, pensioners are expected to start paying income tax on their state pension in 2027.”