From next month, pensioners across Crawley will benefit from changes to the basic State Pension, which will be £800 a year higher than in 2010.
The State Pension is now at its highest level compared to average earnings in two decades. It now rises by the highest of earnings, prices or 2.5%.
The Government’s reforms also look to encourage tomorrow’s pensioners to save too and make growing pensions the norm through automatic enrolment.
Over 5 million people have now been automatically enrolled, and it is estimated that up to 9 million people will be newly saving, or saving more, by 2020. The policy will generate £11 billion of savings each year.
For those of all ages the ISA limit will soon be increased to £15,240, enabling people to keep more of their hard-earned income.
I was pleased to be in the House of Commons last year when the Chancellor announced that, from next month, the 55% tax charge on pensions being passed on will be abolished.
The Government have taken significant steps to help people with inheritance. They have made sure that if someone passes away before the age of 75, they will be able to pass on their pension pot completely tax-free. When someone dies who is 75 or over, any beneficiary will only have to pay their marginal income tax rate, normally 20 per cent, when they drawdown the pension, instead of the previous rate of 55 per cent.
Over the last five years, the government have committed to spending £10 billion more on the basic state pension over the course of the Parliament, than would have been so without the triple lock in place.
Protections have been ensured for the poorest with the over-indexation of the standard minimum guarantee, so they also will benefit from the triple lock.
I am pleased that the Conservatives will ensure there is greater transparency of pensions. There will be a 0.75% charge cap for people automatically enrolled in a work place pension from this April.
This could save an average earner £100,000 over their working life. The Department has also worked to set minimum quality standards and ban hidden pension costs.
These reforms are to ensure that people in Crawley, and throughout our country, who have worked throughout their life are able to enjoy stability and security in retirement.