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Pre-election pledges start with news for pensioners and top rate tax payers

14.01.2014

The policy pledges ahead of the 2015 general election have now started in earnest and David Cameron’s latest announcements provided some fiscal encouragement for both those who are already retired and those who currently pay the top rate of income tax.

Speaking to The Sunday Times, Mr Cameron pledged to raise the state pension by a minimum of 2.5% every year until 2020. In the same interview, Mr Cameron also expressed a desire to cut the top rate of income tax, though he did not give any idea of his desired reduction in the rate.

The decision on pensions sees the government retain the ‘triple lock’ system, which means that pensions rise in line with inflation, in line with wages or by 2.5%, whichever is greater in that given year.

Mr Cameron’s pledge to retain this system, should the conservatives win the general election in 2015, is clearly good news for pensioners, with the Prime Minister stating frequently that he wants to protect the state pension, excluding it from recent welfare cuts.

However, as the government themselves have frequently told us over the last few years, the state pension alone will not be enough for many of us to live off. With the population continuing to get older, the message has been very much one of continuing to encourage private saving, building our own pensions for the future.

Whilst pensioners and soon-to-be pensioners will doubtless welcome Mr Cameron’s pledge then, which will boost their retirement incomes, the message must still be that planning and saving for our own futures and ideal retirement lifestyles is prudent and a necessity.

Sources: http://news.sky.com

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