In new election promise, Sunak proposes tax cuts for pensioners

Rishi Sunak has unveiled a proposal for tax cuts aimed at pensioners in his latest campaign effort, highlighting the critical role of older voters in the forthcoming July election.

Sunak's Conservative Party plans to implement a new age-related allowance, offering a tax reduction of approximately 100 pounds for each of 8 million pensioners in 2025, with the amount rising to nearly 300 pounds annually by the end of the next parliamentary term.

"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," Sunak said in a statement. He called a general election for July 4 last week.

The number of pensioners in Britain increased by 140,000 to 12.6 million in the year to February 2023. Nearly 50 million Britons will be eligible to vote in the election, with opinion polls predicting an end to 14 years of Conservative rule.

The Conservative Party stated that this proposal aligns with its commitment to the triple lock, which ensures increases to publicly funded pensions by the level of earnings, inflation, or 2.5 per cent, whichever is highest.

Labour has also pledged to retain this policy, which was introduced by a Conservative government in 2011 to prevent pensioners from falling into poverty.

However, the costs associated with the triple lock have been scrutinized as British inflation has surged, increasing the government's bill for state pensions by an additional 11 billion pounds last year.

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The new proposal, called "triple lock plus," will cost 2.4 billion pounds a year by 2029/30. This will be funded through the government's plan to raise an extra 6 billion pounds a year by clamping down on tax avoidance and evasion.

“This is just another desperate move from a chaotic Tory party torching any remaining facade of its claims to economic credibility," Labour shadow paymaster general Jonathan Ashworth said in a statement.

The paymaster general, part of the Treasury, acts as a banker for most government departments.

(Reuters)