What is the difference between the pension triple lock and triple lock plus?

Rishi Sunak has promised pensioners will receive a tax break as part of an expansion of the triple lock.

The prime minister announced that from April next year, the income tax personal allowance for pensioners will be increased in line with the triple lock, as he continues the Conservatives’ election campaign.

But what is the significance of this new pledge, and what is the difference between the pensions triple lock and the triple lock plus?

What is the pensions triple lock?

The triple lock guarantees the state pension grows every year in line with inflation, with average UK earnings, or by at least 2.5% - whichever of the three options is highest.

In April 2024, the state pension went up by 8.5%.

The policy helps to ensure pensioners’ living standards keep up with those of the wider population.

How does the State Pension work?

The State Pension is a regular payment from the government people can receive when they reach a certain age.

State Pension age depends on your gender. Men born on or after April 6, 1951 and women born on or after April 6, 1953 are eligible.

How much someone is paid depends on their National Insurance record. The full amount of the new State Pension is £221.20 per week.

What is personal allowance?

Personal allowance is the amount of money you can earn or receive in a year without having to pay any tax.

The standard personal allowance is £12,570. It depends on your age, and how much you earn.

You pay tax on your pension if your total annual income is bigger than your personal allowance.

What is the difference between the triple lock and the triple lock plus?

The triple lock plus will involve taking the rules for the triple lock on state pensions, and applying them to pensioners' personal allowance too.

This means, if elected, the Conservatives will increase personal allowance in line with whichever is highest out of inflation, earnings, or by at least 2.5%.

In short - the amount of income you can have in a year tax-free may go up.

How much would the tax cut be worth?

The Tories have said individual pensioners will save £275 by 2030 if the plans come into place.

How much could the policy cost?

The policy is estimated to cost £2.4 billion a year by 2029/30.

The tax cut will be funded through a previously announced plan to raise £6 billion a year by the end of the next parliament by clamping down on tax avoidance and evasion.

What has Labour said about the triple lock?

Labour have committed to keeping the triple lock, but said they would not match the new triple lock plus pledge.

Shadow Business Secretary Jonathan Reynolds said: “I don’t think it’s credible, I don’t think it’s real, and I think pensioners will completely see through this.”

What has happened to the triple lock in the past?

The triple lock was originally introduced in 2010, and applied every year since - except for a temporary suspension in 2022.

It was paused because the Covid pandemic had distorted the wages element of the triple lock.

In 2022, pensions rose by 3.1%.

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