UK Prime Minister Rishi Sunak has unveiled a new policy promising pensioners a yearly increase of £275 through income tax personal allowance cuts. The plan, projected to cost £2.4 billion annually by 2029-30, aims to be funded by crackdowns on tax evasion as critics question its impact on wealthier retirees and tax fairness.
Prime Minister Rishi Sunak Promises Pensioners £275 a Year in New Policy
On May 28, 2024, UK Prime Minister Rishi Sunak announced a new policy aimed at increasing financial support for pensioners. If re-elected, Sunak promises to increase the income tax personal allowance for pensioners, providing a tax cut that will amount to approximately £95 in 2025-26, rising to £275 in 2029-30. This policy is projected to cost £2.4 billion annually by 2029-30, and will be funded by clamping down on tax evaders.
The announcement comes as Sunak faces criticism from various fronts, including Labour Party leader Sir Keir Starmer, whose party has called the policy a desperate move. Critics such as the Institute for Fiscal Studies and the Resolution Foundation suggest the policy primarily benefits wealthier pensioners and argue that it merely avoids further tax increases rather than offering significant new benefits.
Sunak’s policy introduces the “triple lock plus” guarantee, ensuring that both state pensions and personal allowances will increase based on inflation, average wages, or 2.5%, whichever is higher. Labour has stated it will not implement a similar policy if elected.
