Pensioners have been promised a £2.4bn tax giveaway by the Conservatives as the party battles with Labour to woo older voters.
Rishi Sunak has outlined plans to increase the tax-free allowance for pensioners in line with the existing “triple lock” to ensure it rises each year.
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.
The policy, labelled the “triple lock plus”, will cost around £2.4bn a year by 2030, the Conservatives said.
Labour attacked the policy as being uncosted and accused the Tories of making spending announcements that do not add up.
But the Tories said it would be funded by plans to crack down on tax avoidance and evasion, which the party estimates will generate £6bn a year by 2030.
Part of this £6bn – £1bn worth – has already been ringfenced to pay for the Tories’ other election announcement of introducing a new model of national service.
It is not clear how much the pensioner tax cut would cost in its first year, if Mr Sunak’s party forms the next government.
According to the Tories, the policy would amount to a tax cut of around £100 for eight million pensioners next year and rise to almost £300 a year by the end of the parliament.
It would also guarantee in law that pensioners’ personal allowance will always be higher than the level of the new state pension, which rose to £11,502 a year in April.
Mr Sunak said: “This bold action demonstrates we are on the side of pensioners. The alternative is Labour dragging everyone in receipt of the full state pension into income tax for the first time in history.”
It will come alongside a promise to continue to uprate the state pension in line with the triple lock each year.
Labour has also committed to keeping the triple lock despite concerns over ballooning costs.
The state pension is expected to cost the Government £124bn in 2023-24, according to the budget watchdog.
Last month, Labour launched an advertising campaign targeting Tory-supporting pensioners.
It came after party officials detected alarm over Conservative plans to scrap national insurance contributions might impact pensions and the NHS.
According to recent polling, the over-65s is now the only age group in which the Tories lead Labour.
Jonathan Ashworth, Labour’s shadow paymaster general, said the latest announcement was “jus another desperate move from a chaotic Tory party torching any remaining facade of its claims to economic credibility”.
He added: “Labour will protect the triple lock. But Rishi Sunak is planning to reward Britain’s pensioners for their loyalty by stabbing them in the back, just like he did to Boris Johnson and just like he has done to his own MPs.”
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