“Pensions and pensioners are central to this year’s General Election campaigning, as the ‘grey vote’ holds significant importance.
“The Conservative manifesto provides written confirmation of a range of key pension measures.
“The Conservatives have reaffirmed their commitment to retain the State Pension Triple Lock for a further five years, offering state pensioners a very valuable guarantee of increases equal to the highest of price inflation, earnings growth or 2.5%.
“There has been much speculation over the sustainability of this, but a return to typical historic levels of inflation and earnings growth may make it less costly or unpredictable in future years.
“As previously trailed, the Conservatives would go one step further, under their Triple Lock Plus plans. The ‘Plus’ is a commitment to increase state pensioners’ personal allowance in line with the state pension triple lock. 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 state 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% 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.
“Now that the Conservatives have set out their stall on pensions, we await the Labour manifesto on Thursday to see how it compares.”
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