Published On: Thu, Mar 28th, 2024
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State pension triple lock ‘wiped out’ after Jeremy Hunt ‘stealth tax’ | Personal Finance | Finance

Pensioners across the country will see an 8.5 percent increase in their pension next month. The triple lock system means the state pension rises in line with average earnings growth, inflation or 2.5 percent – whichever is highest. The boost will hand many retired Brits an extra £190 in the next tax year after adjusting for higher prices.

However, a new study from the Resolution Foundation has found that the much-lauded increase will amount to very little. The think tank discovered that pensioners will end up just £20 a year better off thanks to Jeremy Hunt’s “stealth tax” raid.

The Chancellor’s six-year freeze in income tax thresholds will cost pensioners £170. The Resolution Foundation said: “A basic-rate tax-paying pensioner will essentially see their above-inflation state pension rise wiped by this April’s personal allowance freeze.”

The think tank has previously highlighted that eight million pensioners are facing a £1,000 hit from Mr Hunt’s stealth tax raid since pensioners do not benefit from recent NI cuts.

Jeremy Hunt has pledged this week that the Conservatives will keep the triple lock pension system in place if they win the next election.

He told the BBC‘s Sunday with Laura Kuenssberg that he was confident the “expensive” promise would be paid by growing the economy.

Meanwhile, Labour leader Sir Keir Starmer declined to say if the triple lock would be in his party’s manifesto when asked last week. More than 12 million people in the UK receive the state pension.

Next month’s increase is set to be the second significant rise in the state pension in two years, after a 10.1 percent increase in April last year.

The rate of price rises in the UK has been dramatically high in recent years, putting pensioners, as well as working families under significant financial pressure.

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