Thank you for contacting me about the Organise Campaign’s Members’ Pensioner Manifesto.
The Government is committed to ensuring that older people can live with the dignity and respect they deserve. I welcome that, since 2010, more than 200,000 pensioners have been lifted out of absolute poverty. In addition, I welcome that the Government’s unprecedented cost of living support has prevented 400,000 pensioners from falling into absolute poverty.
As you raise a number of concerns in your correspondence, I address them separately below:
Taxation
While I note your concerns about taxation, the Personal Allowance is currently set at a level high enough to ensure that pensioners whose sole income is the new State Pension or basic State Pension do not pay any Income Tax. Exempting the State Pension from taxation would add complexity to the tax system, and those paying higher rates of tax would receive the greatest benefit.
Triple Lock
As you may know, the Government is maintaining the Triple Lock in full for 2024-25. This means that the basic State Pension, new State Pension and Pension Credit standard minimum guarantee have been uprated in line with average earnings growth of 8.5 per cent from 8 April. This follows last year’s record rise of 10.1 per cent and means that pensioners will have £900 more in their pockets this year. This increase is the same as the £900 workers will save from the National Insurance cuts at the last two fiscal events and means that the full yearly basic State Pension is £3,700 more than in 2010.
If you have worked hard all your life, it is vital that you have the dignity you deserve in retirement. I know that the Triple Lock is an expression of that, and therefore welcome the Prime Minister’s commitment to maintaining the Triple Lock for 2025/26 and beyond. In addition, I am pleased that maintaining the Triple Lock is a manifesto commitment that I will stand on at the next general election.
State Pension Age
I am aware of no plans to reduce the State Pension age to 60. The Government is committed in legislation to undertake a review of the State Pension age every six years to consider a variety of factors including the latest life expectancy projections. The last review, published in March 2023, concluded that the planned pension age rise from 66 to 67 for those born after April 1960 remains appropriate.
Given rising life expectancy, it is right that we continue to keep the State Pension age under regular review to ensure the system remains sustainable for future generations. More broadly, I welcome that the Local Housing Allowance, which benefits thousands of pensioners, has increased to the 30th percentile and Pension Credit has been uprated by 8.5 per cent, supporting pensioners on the lowest incomes further. In addition, I welcomed that last winter, the Government made nearly 12 million payments of up to £600 through Pensioner Cost of Living Payments and Winter Fuel Payments. Moreover, I am pleased that through the Government’s careful economic management, inflation has been reduced to 3.4 per cent.
Thank you again for taking the time to contact me.
Kind regards,
Graham
