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UK PM Sunak pledges tax cuts for retirees, new proposal costs £2.4 billion annually

TraderKnows
TraderKnows
05-28

The UK general election will be held on July 4th. In a bid to win votes, the current British Prime Minister, Sunak, has chosen to cut taxes for retirees.

British Prime Minister Rishi Sunak proposed a tax cut for millions of retirees on Monday in his latest campaign pledge, highlighting the importance of older voters in the upcoming July election.

Sunak's Conservative Party announced plans to introduce new age-related allowances and offer a tax cut of about £100 per person for 8 million retirees in 2025, increasing to nearly £300 annually by the end of the next parliament.

In a statement, Sunak said, "This bold move shows that we are on the side of retirees. Otherwise, Labour will include all those receiving the full state pension in income tax for the first time." Last week, Sunak announced that the general election would be held on July 4th.

As of February 2023, the number of retirees in the UK has increased by 140,000 to 12.6 million. Nearly 50 million Brits are expected to be eligible to vote in this election, with polls predicting it could end the Conservatives' 14-year rule.

The Conservative Party stated that this proposal coincides with their so-called "triple lock" pledge, which guarantees that public pensions will rise by the highest of either earnings, inflation, or 2.5%.

Labour has also vowed to maintain this policy, which was introduced by the Conservative government in 2011 to prevent retirees from falling into poverty.

However, in recent years, the related costs have come under increasing scrutiny due to surging inflation in the UK. Last year, the state pension added an extra £11 billion to government expenditure.

The Conservative Party stated that the new proposal, referred to as "triple lock plus," will cost £2.4 billion annually by 2029/30, funded by an additional £6 billion per year through the government's previously announced plans to tackle tax avoidance and evasion.

Shadow Chancellor of the Exchequer Jonathan Ashworth criticized the plan in a statement, calling it "a desperate attempt by a chaotic Conservative Party to salvage their economic credibility."

The Chancellor of the Exchequer is affiliated with the Treasury and provides banking services to most government departments.

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