Mel Stride responds to questioning on pension triple lock plans
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Two million more pensioners face paying income tax under a stealth raid by Rishi Sunak and Jeremy Hunt. The Chancellor is expected to announce an extended freeze on tax thresholds when he unveils his autumn statement next week.
Mr Hunt is also expected to confirm the state pension triple lock, which the Daily Express has been campaigning to protect, will go ahead.
The move would see pensioners receive a bumper 10 percent boost to their payments from next April.
However, the combination of the increase and freeze means a further two million pensioners – up from seven million to nine million – are set to be forced to pay income tax.
Analysis by pensions consultancy LCP found the triple lock boost will push almost half a million pensioners over the personal tax allowance, which is frozen at £12,570 until 2026 and expected to remain at that level until 2028 under the autumn statement.
The total number of pensioners paying income tax will go up to nine million if the threshold remains frozen until 2028, according to LCP’s analysis.
Sir Steve Webb, of LCP and a former pensions minister, said it was a “backdoor way of raising tax”.
He told the Telegraph: “Over a million pensioners have been brought into the tax net since the last general election and more could be forced to pay tax for the first time if the existing allowance freeze is extended again.”
It comes as Work and Pensions Secretary Mel Stride today insisted retirees will be kept to the “forefront” as difficult spending decisions are taken in a signal the triple lock – a 2019 Tory manifesto commitment – will go ahead.
The policy, which sees the state pension uprated by the highest out of 2.5 percent, wages and inflation – was thrown into doubt when Mr Sunak entered No 10 last month.
It comes as the Prime Minister and the Chancellor are considering imposing up to £60 billion in tax rises and spending cuts in the autumn budget on November 17.
Treasury sources insisted no decisions have been taken, but did not deny a report in the Times that pensions and benefits would rise in line with inflation next year which could cost £11 billion.
Mr Stride told Times Radio: “Pensioners are absolutely at the forefront of the group that we want to really protect as much as we can through these difficult times.”
But he reiterated that there are “tough choices” coming for Mr Sunak and Mr Hunt.
It comes as almost 300,000 people have signed the Daily Express’ petition to protect the triple lock.
Pensioners have been left in limbo as the PM has refused to commit to the policy ahead of the autumn statement as he and Mr Hunt look to plug a black hole in the public finances.
A Treasury spokesman said: “We’re committed to protecting low-income households which is why we have increased the personal allowance by over 40pc in real terms since 2010, excluding the lowest earners from paying income tax altogether.
“Moreover, our income tax system is highly progressive with the top 50pc of income taxpayers expected to pay around 92pc of total income tax this year, while the bottom 25pc are expected to pay just 2pc.”
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