Winning over pensioners has been key in the run-up to the general election. With the Labour party now confirmed as the next government, many retirees will want to know what this means for them. Below, i runs through the key changes that may impact your retirement, and what they mean for you.
State pension triple lock to continue The Labour Party has committed to keeping the state pension triple lock in place once it forms a government. The triple lock ensures that the state pension rises by the highest of inflation, average earnings growth, or 2.5 per cent each year.
The commitment means that the policy is likely to stay in place until 2030 at least. The full new state pension currently sits at £11,542 per year, although some pensioners get less and some get more. Exactly what the state pension will be by 2030 depends on how high inflation and average earnings growth is over the next five years.
But calculations for i suggest it could reach more than £13,000 per year by the end of the decade. There will be no ‘triple lock plus’ If the Conservatives had won, Rishi Sunak had outlined plans to increase the tax-free allowance for pensioners in line with the existing triple lock to ensure it rises each year – what he called “triple lock plus”. It would mean both the state pension and retirees’ tax-free allowance – currently £12,570 – would increase in line with inflation, average earnings, or 2.
5 per cent, whichever is highest. Tax thresholds are currently froze.
