The Conservatives have proposed a new ‘age-related’ tax-free allowance for pensioners, named ‘triple lock plus’, to be implemented if they win the next election.
Currently, both workers and pensioners can earn up to £12,570 per year without paying income tax – however the new plans, which would be begin from next April, would see pensioners’ allowances increase every year by either average earnings, inflation or 2.5% (whichever is highest), in a similar vein to the state pension’s ‘triple lock’ system.
The initiative is intended to ensure that pensioners’ allowances will always be higher than the new state pension amount.
The original ‘triple lock’ mechanism was first introduced in 2010 to help alleviate poverty amongst pension-age individuals. Although the state pension has consistently increased in the intervening years, the income tax threshold has remained static since April 2021, causing some lower-income individuals to start paying tax: the ‘triple lock plus’ aims to lift this tax burden for pensioners.