Hunt’s pensioner penalty Budget set to wipe out half of the triple lock

10 Mar 2024

EMBARGO: Immediate Release

Half (46%) of the gains from the basic state pension triple lock will be wiped out by Jeremy Hunt’s £8 billion pensioner penalty stealth tax
A typical pensioner paying the basic rate of income tax will see their Basic State Pension rise by £1,485 by 2027-28 under the triple lock, but lose £684 to the Government’s personal allowance freeze
Lib Dems slam the Chancellor for taking “a bolt cutter” to the triple lock

Close to half of the expected extra income to the state pension generated by the triple lock will be wiped out by Jeremy Hunt’s stealth taxes on pensioners, Liberal Democrat analysis has revealed.

The research shows a typical pensioner will pay a total of £3,134 in stealth taxes over the next five years due to the Conservative government’s decision to freeze income tax thresholds. The annual hit from stealth taxes will rise from £530 in 2024-25 to almost £700 by 2028-29.

This will wipe out 46% of the expected increase in the state pension due to the triple lock, which will see someone on the Basic State Pension receive £1,485 more a year in pension payments by 2028-29.

Eight million pensioners are set to be impacted by the Chancellor’s decision to freeze income tax thresholds while only cutting National Insurance, which doesn’t benefit pensioners.

Separate Liberal Democrat analysis has also identified that 94 of the 100 worst affected seats by this pensioner penalty are held by Conservative MPs, including six cabinet ministers. Health Secretary Victoria Atkins’ seat is the fourth worst affected and the Education Secretary Gillian Keegan’s is seventh.

The Prime Minister’s seat of Richmond (Yorks) will see 18,000 pensioners hit by the stealth tax and in the Chancellor’s constituency, 15,000 pensioners will be worse off as a result, far larger than his 9,000 majority over the Lib Dems placing his seat under further pressure.

The Liberal Democrats were the first party to commit in full to the triple lock for the upcoming election, which ensures pensions will see an increase by whichever is highest of average earnings growth, CPI inflation, or 2.5%. The party has also called on the government to double the Winter Fuel Allowance to offer extra help to pensioners, paid for by a proper windfall tax on the oil and gas companies.

Liberal Democrat Treasury spokesperson Sarah Olney MP said:

“Jeremy Hunt has taken a bolt cutter to the triple lock with his stealth tax raid on millions of pensioners.

“These are people who have worked hard and played by the rules all their lives, only for the Conservative government to hammer them with unfair tax hikes during a cost of living crisis.

“This pensioner penalty will not be forgotten come the General Election. Many voters are rightly furious that this Conservative government has decided to utterly abandon pensioners.”

ENDS

Notes to Editors:

The Liberal Democrat analysis can be found here.

Liberal Democrat analysis of the worst affected seats can be found here.