State pensioners could get £300 a year tax cut thanks to triple lock

The quadruple lock - or Triple Lock plus - could lead to state pensioners receiving £300 extra in tax savings by the end of the decade.
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A state pension windfall is on the horizon for UK residents, with a potential £300 annual saving in the offing.

The so-called quadruple lock, or Triple Lock plus, might result in state pensioners pocketing an additional £300 in tax savings by the decade's end. Julian Jessop, economics fellow at the Institute of Economic Affairs, highlighted the significant benefit of the policy: "poorer retirees living just on the state pension won't pay income tax".

"All pensioners will benefit, even the wealthiest; favours pensioners over younger people; further complicates the tax system; doubles down on the 'triple lock' itself (which many economists believe is unsustainable)," he added.

Kirsty Anderson, a retirement specialist at Quilter, pointed out: "Our previous analysis found that pensioners could need to pay back a proportion of their state pension in income tax in just two years' time. Simply from an administrative point of view this would prove difficult for HMRC so it seems unlikely if Labour were to get in, they would not be forced to act in some way."

"Frozen thresholds continue to raise tax revenues through the backdoor due to fiscal drag. Unless thresholds are changed meaningfully the whole nation will suffer an ever-bigger tax burden," she added.

"Increasing the personal allowance just for pensioners may be popular with pensioners but the rest of the tax paying public may feel that separate more beneficial rules for pensioners further increases intergenerational inequality.", reports Birmingham Live.

Claire Trott, Divisional Director of Retirement and Holistic Planning at St. James's Place, commented: "The concept of the state pension being taxed and the complexities this would bring has often been discussed, such as the costs and resource required to chase tax returns for those whose only income is the state pension."

She further added: "These new proposals would remove this concern and be welcomed by pensioners. It would also have an impact on those with personal pensions and other forms of retirement income, as the personal allowance isn't only applicable to the state pension and will mean that those who have diligently saved in their lifetimes will still benefit too."